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The economic story of the summer is inflation’s resilience.

How much higher will the Bank of Canada have to push interest rates to cool the rising cost of living? There’s a widespread feeling in the financial community that at least one more rate hike will be needed, possibly on July 12. That’s the next opportunity for the central bank to adjust its overnight rate.

Savers and conservative investors, you should expect another increase in the overnight rate to be reflected in the rates on high interest savings accounts available in both a mutual fund and exchange-traded fund format. Yields on guaranteed investment certificates could also rise if another Bank of Canada increase results in higher yields in the bond market.

Savings accounts at banks, even alternative banks, don’t directly track the Bank of Canada’s overnight rate. Rates on these accounts can be as high 2.5 to 4.1 per cent right now – don’t expect more if the central bank moves again.

The easiest way to position yourself to benefit from further rate increases is to use HISAs that are available from online brokers through their mutual fund trading platform, or HISAs packaged as exchange traded funds. ETF HISAs offer after-fee yields around 5 per cent right now, but you may have to pay brokerage commissions to buy and sell. Also, the online brokers BMO InvestorLine, RBC Direct Investing and TD Direct Investing do not allow their clients to buy these ETFs. The alternative is the mutual fund-style HISA, which offered yields between 4.2 and 4.6 per cent as of late this week.

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If you have money to lock into GICs and want a great rate, now’s not a bad time to buy because there are 5 per cent yields available for terms of one, two, three and, in the case of EQ Bank, five years. Holding out for more competition on rates? There’s justification for this in the run-up in yields on five-year Government of Canada bonds in recent weeks to a 15-year high reached Thursday. If the housing market stays hot, more GIC issuers could offer 5 per cent for five years to attract money to lend out.

A cashable GIC is one option for biding your time while you wait for higher rates ahead, but the rate penalty for liquidity is roughly one to 1.5 percentage points. You could also park cash in a HISA product and then sell if rates rise so you can redirect your money into a GIC.

Mutual fund-style HISAs work well for investors with accounts of all sizes because the minimum purchase can be as low as $500 to $1,000. You can buy any amount of HISA ETFs, but they’re really only economical if you either have a large amount to invest or you have a broker or trading app that doesn’t charge commissions for ETFs.

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