February 14, 2018 – What’s the difference between interest and compound interest? Or between a defined-contribution pension plan and a defined-benefit plan? What about between fixed and variable APR?
A new public opinion poll from the Angus Reid Institute – released as Canadians prepare for the upcoming tax-filing season – finds substantial numbers of respondents unsure how to answer these and other financial literacy questions.
Presented with a list of 18 common banking and finance terms, a majority of Canadians say they are “very confident” in the meaning of just two: “savings account” and “high-interest savings account.” Respondents are at least “fairly confident” in their understanding of most of the terms canvassed, however, with fully six-in-ten expressing this level of confidence in nine of the 18 entries on the list.
Women and younger Canadians tend to express the least confidence in their financial understanding, with young women especially uncertain in comparison to men their age.
More Key Findings:
- Tax-related terms are among the more well-understood items on the list. More than eight-in-ten (82%) express confidence in their knowledge about RRSPs, and almost as many (72%) say the same about TFSAs.
- The public is least confident in its understanding of “Bitcoin,” with seven-in-ten (70%) expressing uncertainty about the term
- Wealthier Canadians are more likely to express confidence in their understanding of each of the 18 terms canvassed
Link to the poll here: www.angusreid.org/canadians-confidence-financial-terms