Canadian Investing Glossary

Short, clear definitions of the essential terms for self-directed Canadian investors. Registered accounts (RRSP, TFSA, FHSA), taxation (ACB, capital gains, dividends), instruments (ETFs), and fees (MER).

ACB

Adjusted Cost Base: weighted-average cost used to calculate capital gains/losses.

TFSA

Tax-Free Savings Account — tax-sheltered growth, tax-free withdrawals.

FHSA

First Home Savings Account — combines RRSP deduction with TFSA-style withdrawals.

RRSP

Registered Retirement Savings Plan: tax deduction, tax-deferred growth.

ETF

Exchange-Traded Fund: diversified basket of assets at low cost.

Dividend

Portion of a company's earnings distributed to shareholders.

Capital gains

Profit realized on sale of an investment. Taxed at 50% inclusion in Canada.

MER

Management Expense Ratio: annual fees of an ETF or mutual fund, as % of assets.