FAQ – Savings and investment – Market-linked guaranteed investment

Market-linked guaranteed investments are, in fact, caisse deposits. Returns are therefore taxed the same way as GICs or term savings. Guaranteed investments returns are always considered interest income and not capital gains.

• If the market-linked guaranteed investment is a TFSA or RRSP, returns will not be taxed, just like any other registered investment.
• If it's a non-registered market-linked guaranteed investment with no minimum annual guaranteed return, returns are only known at maturity or when a fixed return option is taken out. Unlike traditional term savings where annual interest is taxed on an annual basis, interest earned on your market-linked guaranteed investment is taxed only the year the return is known.
• In the case of non-registered market-linked guaranteed investment with a minimum annual guaranteed return, interest is taxable annually since the minimum annual guaranteed return is known in advance.