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You can look up daily fund prices,
track performance, & monitor your
portfolio at Globefund.
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Savings accounts are the simplest way to
earn interest. The interest is generally
low (less than one per cent these days)
because the money can be withdrawn at
whim. Interest can also be determined
by whether the savings account is bundled
with a chequing account.
Check Current Savings Rates
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Guaranteed Investment Certificates
(GICs) - are for investing in
for a year or more - usually one to five
years - and come in various forms with
different available options. Check out
the options offered and determine which
suit your needs and situation most closely.
For example, some can offer a low interest
rate in the first year and more attractive
returns in subsequent years. Always check
if there are penalties for early withdrawal
and how much those penalties are. It is
important to consider the liquidity of
any investment. Liquidity means how available
your money will be if you want to withdraw
it on short notice. Generally, the more
liquidity you want, the lower the interest-rate
return. Long-term rates tend to be higher,
but in high-inflation and pre-recession
environments, this may not hold true.
Check current GIC Rates
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Canada Savings Bonds - typically offer more
liquidity than GICs. They can be cashed
in without penalty after 90 days if you
do it at month end. Terms vary from issue
to issue. They have been made more attractive
lately because of stepped-up guarantees
on rates beyond the first year. For example,
three per cent could rise to 5.00 percent.
Minimum purchase is usually $100 and the
maximum $500,000.
Check Current CSB Rates
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Money Market Mutual Funds - invest in federal government
treasury bills, provincial treasury bills,
and short-term commercial paper issued
by the most credit-worthy corporations.
The return for these funds are expressed
as a yield.
Check Current T-Bill Rates
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Bond Mutual Funds - are a pool of government
and/or corporate bond investments that
are professionally managed. They have
two components: the rate of interest the
bond is paying and the price you pay for
the bond. If a bond is paying five per
cent and interest rates move higher, the
bond is less attractive and therefore
worth less. The price of bond mutual funds,
therefore, moves in an inverse direction
to interest rates.
Check Current Canadian Government
Bond Yields
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Balanced Mutual Funds - are a combination of
cash, fixed income (such as bonds) and
equities (such as stocks). These funds
are an efficient way to spread your money
across different types of investments.
When stock markets are down, for example,
bond markets may be up, or vice versa.
Diversification by asset class is the
objective with these types of funds. They
will tend to produce a lesser rate of
return over the longer term, than equity-based
vehicles, but will tend to exhibit lower
volatility.
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Equity Mutual Funds - are mutual funds that
invest in a mixture of stocks. Equity
funds are categorized by the types of
stocks in which they invest. For example,
by geography or industry type. Usually,
these types of funds will be more volatile
and generate the highest rate of return
over longer investment time frames.
Check Current Stock Market
Conditions
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Labour Sponsored Mutual Funds - are equity type investment
funds sponsored by labour to provide venture
capital for small and medium-sized businesses.
Most of these funds are provincially based,
although some national labour funds exist
as well. Thanks to the generous tax credits
they offer investors, these funds have
proven quite popular. To benefit from
these tax credits, investors must typically
allow their investment to remain in the
fund for a minimum of eight years. It
should be noted that the large tax credits
are offered as a "risk premium"
of sorts. These funds will tend to be
towards extreme end of potential volatility.
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