How do you find the best place to invest in the short term? It takes two steps:
- Compare different products and decide which one gives you the features you need. You have to think about when you will need your money, for example, and what fees you will have to pay.
- Then shop around to get the very best interest rate. What you get will depend on what you buy and where you buy it.
Start by talking to the place where you already bank about their products. You can branch out from there to talk to other financial institutions. Make sure you ask questions like these:
- What interest rate will I get?
- Do I qualify for any special rates? Can I get a higher interest rate if I invest more money?
- Is there another safe option that pays a bit more?
- Are there service fees and how much are they?
- Are there any other costs?
- Can I get my money when I want it - quickly, easily, and without penalty?
- Is there any risk I could lose any of my money?
- Could the interest rate change? What could cause the rate to change?
- Do I have to make a minimum deposit?
- Is my money insured by the government?
Don't forget: banks and other financial institutions really do compete. You can often get a better deal if you take some time to ask questions.
Raymond just got a $1,000 bonus at work. He is not sure what he wants to do with this money, but he knows he should invest it for the short term, until he decides. To learn what short-term investment he chooses, read Deciding where to save: Raymond's story.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.