FAQ: How Do I Change the Investment Income Types (Dividend, Capital Gains, Interest) in My Non-Registered Accounts?

The platform will automatically calculate non-registered income sources including interest/bond coupons, capital gains, Canadian dividends and foreign dividends. As a default the equity return is made up of capital gains (60%), Canadian dividends (20%) and foreign dividends (20%). This split can be adjusted in two places:

Adjust in All Scenarios:

If you'd like to change the investment income types in all scenarios this can be done in Discovery > Investment Plan.

If you're not sure, then start with the defaults, they represent a diversified ETF portfolio. But if you have a concentration of Canadian dividend paying equities in your non-registered account then you may want to increase the % of return coming from Canadian Dividends and decrease the % coming from Foreign dividends. If you invest mostly in dividend paying equities then you might decrease the capital gains return % and increase the dividend return %.

As an example, to calculate your type of return you might sum up your Canadian and your Foreign dividends for the year, divide that by your beginning balance, then divide that by the equity return assumption of 6.71% (assuming no fees).

For example, $5,000 dividends on a $100,000 portfolio means a 5% average dividend rate. Divided by 6.71% means approximately 75% of the returns are coming from dividends.

Adjust in a Specific Scenario:

It can also be adjusted in a specific scenario using Planning > Projections > Advanced Options. Go to the Taxable Account area and open the return column using the “>” arrow.

Inside an RRSP and TFSA the platform does not differentiate between the type of return, only total return matters.