TORONTO, ONTARIO--(Marketwired - Nov 2, 2013) - Heading into Financial Literacy Month, BMO Financial Group has released its third annual BMO Financial Literacy Report Card which gauges the personal finance knowledge and understanding of Canadians.

The majority of Canadians (91 per cent) give themselves a passing grade for their level of financial literacy. That's down slightly from 2012 (93 per cent), and up from 2011 (89 per cent).

For a breakdown of how Canadians graded themselves, this year's report revealed:

"Financial literacy is an issue that affects Canadians of all ages, and continuing to put programs in place to support the improvement of these skills will contribute greatly to the well-being of families, as well as the overall economy," said L. Jacques Ménard, Chairman of BMO Nesbitt Burns and Financial Literacy Task Force Vice-Chair. "In order to achieve this, it needs to remain a focus for all stakeholders involved to ensure Canadians at large gain the knowledge, skills and confidence to make responsible financial decisions at all stages of their lives."

Mr. Ménard added that BMO strongly supports the efforts and recommendations put forth by the federal government, including the Task Force on Financial Literacy and the adoption of the Financial Literacy Leader Act in March 2013.

The report, conducted by Pollara, also revealed how confident Canadians are in their knowledge of various financial terms compared to a year ago. As in 2012, Registered Retirement Savings Plans (RRSPs) and Tax Free Savings Accounts (TFSAs) are the types of investments with which Canadians are most familiar, although the numbers have decreased slightly:

• Registered Retirement Savings Plan (RRSP) - 77 per cent; down from 79 per cent

• Tax Free Savings Account (TFSA) - 67 per cent; down from 72 per cent

• Guaranteed Investment Certificate (GIC) - 59 per cent; down from 62 per cent

Meanwhile, Canadians continue to feel least knowledgeable about:

• Registered Disability Savings Plan (RDSP) - 24 per cent

• Dividend Reinvestment Plan (DRIP) - 24 per cent

• Exchange Traded Funds (ETFs) - 22 per cent

Financial Literacy Quiz Scores Slipping Slightly

According to the report, many Canadians may have a false sense of confidence in their level of financial knowledge. As part of the report card, Canadians were quizzed on three questions related to common financial concepts. The report revealed:

• Nearly one-third (31 per cent) of those who give themselves an "A" were not able to answer more than half of the questions correctly.

• Moreover, while Canadians say they are most familiar with RRSPs, 66 per cent correctly answered that you only pay taxes on RRSP investments when they are withdrawn - down from 80 per cent in 2012.

• Fewer than half (48 per cent) understand the benefits of compounded interest, down from 57 per cent last year.

• Younger Canadians have more trouble with these questions, with only 39 per cent of those under 35 passing the test.