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Saving Money

Got some money lying around? Ten short-term investing options Add to ...

10 common options

1. Chequing account

  • Pays lowest interest of any short-term investment
  • Has low risk
  • Usually charges a service fee
  • You can put in as much or as little money as you want
  • You can get your money out any time

2. Savings account

  • Pays slightly higher interest than chequing account
  • Has low risk
  • May charge a service fee
  • You can put in as much or as little money as you want
  • You can get your money out any time

3. High-interest-rate savings account

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  • Pays slightly higher interest than regular savings account
  • Has low risk​
  • You may have to put in a minimum deposit
  • You may have to let online banks know a day or 2 ahead to get your money out

4. Guaranteed Investment Certificate (GIC)

  • May pay higher interest than savings account, but not always
  • Has low risk
  • Most require you to invest at least $500
  • You must invest for a certain amount of time (from 6 months to up to 10 years)
  • You may pay a penalty to get your money out early

5. Canada Savings Bond

  • Pays interest rate similar to GIC
  • Has low risk
  • You have to invest at least $100
  • You must invest for a certain amount of time
  • You may pay a penalty to get your money out early

6. Treasury bill (T-Bill)

  • Has low risk
  • Pays a higher return than most savings accounts
  • May require you to invest at least $5,000
  • May charge a penalty if you take your money out early

7. Money market fund

  • Has low risk
  • Pays a similar return to T-bills
  • May require you to invest at least $500
  • May charge fees but no penalty when you withdraw money

8. Commercial paper

  • Risk varies depending on the type of commercial paper
  • Pays a slightly higher return than most T-bills
  • May require you to invest at least $5,000
  • May charge a penalty if you take your money out early

9. Government bond

  • Risk varies depending on the type of bond
  • May require you to invest at least $5,000
  • Does not charge a penalty if you sell early (but you may have to sell at a lower price if interest rates have changed)
  • Does not guarantee you will make money

10. Corporate bond

  • Risk varies depending on the type of bond
  • May require you to invest at least $5,000
  • Does not charge a penalty if you sell early (but you may have to sell at a lower price if interest rates have changed)
  • Does not guarantee you will make money

 

Look for better returns: Keeping your money in a regular savings account can make sense if your financial goals are short term. But if you’re a couple of years away from reaching your goals, you could be earning a better return on your savings. Read Linda’s story to see how.


 

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

 

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