Name two tax-advantaged Canadian accounts used for saving and investing.

• A. RRSP (Registered Retirement Savings Plan) and RESP (Registered Education Savings Plan).
• B. RRSP (Registered Retirement Savings Plan) and TFSA (Tax-Free Savings Account).
• C. TFSA (Tax-Free Savings Account) and RESP (Registered Education Savings Plan).
• D. Asset allocation and diversification.

Answer: (D)

In Canada, two primary tax-advantaged accounts designed for saving and investing are RRSPs and TFSAs. An RRSP gives you an income tax deduction for contributions, and the investments inside grow tax-deferred until withdrawal, typically in retirement when your tax rate may be lower. A TFSA combines tax-free growth with tax-free withdrawals, meaning you don’t pay tax on investment earnings or on withdrawals for any purpose. These features make both accounts flexible tools for long‑term saving and investing, with different tax implications to fit various goals.

The other option reflects investment techniques rather than an account type. Asset allocation and diversification describe how you distribute money across asset classes to manage risk and return, not a registered account you contribute to. RESP is an education-focused registered plan with its own rules and grants, not one of the two general-purpose tax-advantaged saving/investing accounts.