Which financial instrument typically does NOT provide a tax-deferral option?

A taxable investment account typically does not provide a tax-deferral option because any investment income generated, such as interest, dividends, or capital gains, is subject to taxes in the year it is earned. Unlike registered accounts like RRSPs or TFSAs, where contributions can either be tax-deferred or tax-free, the funds in a taxable investment account do not benefit from such tax advantages.

In contrast, registered accounts such as RRSPs allow for contributions to grow tax-deferred until withdrawal, while TFSAs permit tax-free growth and withdrawals. A prescribed annuity also provides certain tax benefits, particularly regarding how income is taxed over time. Therefore, the taxable investment account is distinct in that it is fully exposed to annual taxation on accumulated income, highlighting why it does not offer a tax-deferral benefit.