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Saving Money and Managing Debt

Deciding where to save: Raymond's story Add to ...

What will Raymond do with his $1,000 bonus? He has wanted a new computer for a while, and now he can afford to buy it. Still, he hasn’t quite made up his mind if this is what he wants to do with his bonus. He decides to put his money into a short-term investment while he shops around.

After a visit to his bank and some searching on the Internet, Raymond has made a list of his top choices and the best interest rates he can get. Here’s what he finds:

More Related to this Story

Type of investmentValue of Raymond’s investment nowRate of returnHow much will Raymond have after one year
Savings account$ 1,000.000.70%$1,007.00
High-interest savings account$ 1,000.003.15%$1,031.50
Canada Savings Bond$ 1,000.002.75%$1,027.50
Guaranteed Investment Certificate (one-year)$ 1,000.003.20%$1,032.00

 

Raymond’s decision: He puts his $1,000 into a high-interest savings account at an Internet-based bank. If he decides to get the computer, he can get his money out fast, without any penalty. And, he gets the highest interest rate without any service fees.

Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca

Follow us on Twitter: @GlobeInvestor

 

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