I have $6000 which I will not be needing to spend. Should I buy Canada premium bonds (interest is 2.75% for the first year, forgot second year, and 3.05% on the third). If I put it in a savings account, it will be with HSBC, and its 3%. There are not monthly fees or transactions with either the savings account or the bonds. I will not be needing the money for a few years and I know the bonds can only be cashed at the issue date.
I am a student, I work part. Are there other low risk investments? I heard from my parents that HSBC does not treat customers well unless you have a lot of money.
I am currently getting 0.05% from the Bank of Montreal
What are your opinions?
2 answers
beenthere
July 28th, 2010 at 1:22 am
My local credit union pays 3%. I also have money in an internet account with ING Direct. Their rate is also 3%. Both of those are regular accounts with no restrictions. If you put the money into ING Direct for a stated period of time, like a GIC, the rate is higher depending on whether you put it in for less than one year or one, two, three, four or five years. Speak to a rep at your local bank and ask if they offer an internet account and ask about the rates. Also ask them about their gic or locked in rates.
Corporate bonds can be bought and sold at any time regardless of their issue date. If you hold a corporate bond paying a rate of more than 3%, you would be able to sell it for a premium. Someone would be willing to pay you $1.01 or $1.02 for every $1.00 that you hold. However, if you have a bond with a lower rate of interest, you could only sell it for slightly less than par value. If you hold it until it is redeemed, you will get par value.
Go to .http://www.gicdirect.ca to find the best rates available in your town or your province.
Mugwug
July 28th, 2010 at 2:05 am
Put your money in a High Interest Account instead of locking it in. Right now Peoples Trust in British Columbia is paying 4% on their high interest account (online);
https://thebestrate.peoplestrust.com/chooseTheRightDeposit.php#pcsa
(CDIC insured, although their web access isn’t as shiny as INGs – You can link it to your ING account for ease of transfers in or out using the ING account to push/pull funds).
And ING itself is paying double interest on their TFSA account (at 3% that means deposits made between now and Jan 1, 2009 earn 6% on deposits up to $5,000) as an introductory thing. Only two months, but higher interest is higher interest.
Personally I’d move my money into the ING TFSA account until Jan 1 and then shift it over to the Peoples Trust account. If rates look like they’re going to slip lower then I’d lock into a GIC.
Hope this was some help!