As interest rates have hit rock bottom, so many people are looking to find the best return on their investment. They want the kind where their money isn't at that much risk.
As the tax season draws to a close a great many Canadians are looking for somewhere save to put any refund they receive. They want the kinds of account where it can earn a decent amount of interest for them. You may find it takes some time to find a rate that is able to keep up with inflation. Even then you may find that you won't do much more than break even. During this time most banks will offer higher rates for short periods. What they are hoping is you will deposit your funds into one of these accounts. Then after the promotional period has expired you will continue to leave the money there.
When it comes to finding suitable accounts into which you place any extra funds you have then think about the following:
First you could consider placing your money with Tangerine known as ING Direct before. They have a promotion going that pays 2.5% interest on all new deposits. These must be made before the 30th June. They can be placed into a new or existing savings account.
Otherwise you might want to consider going with President's Choice Financial. They are also offering 2.5% interest on all new deposits up until the 30th June.
These online banks are well known for their no fee accounts and the high interest they pay on savings. But each one has lowered their rates over the past few years. This means that they no sit in amongst Canada's top 10 high interest saving rates.
If you are looking for more competitive rates then looking at placing your funds into one of the smaller banks or a credit union. At this present time you'll find that the best rate available is 1.9%. This you can get through AcceleRate Financial and Steinbach Credit Union from Winnipeg. Also the same goes for Canadian Direct Financial from Edmonton.
For those of you who live outside of Quebec you might want to think of opening account with any one of the above. But make sure that you pay close attention to those that do not come with CDIC deposit insurance. If the financial institution is a member of the CDIC then your savings get protected up to $100,000 should the bank fail. But shouldn't your savings have such protection then you could well lose them.
When it comes to credit unions you'll find that the cover offered here will vary from one part of Canada to the next. For example, in Manitoba any funds deposited in credit union accounts is covered by the Deposit Guarantee Corp of Manitoba. Whereas in Ontario money placed in a credit union is covered by the Deposit Insurance Corp of Ontario. Unfortunately the big banks tend to pay next to nothing on a savings account if the balance held is less than $5,000. At present both CIBC and Scotiabank pay just 0.2% interest on accounts with less than $5,000 in them. But as soon as you reach this sum they both have high interest accounts that pay 1.05%. As for TD they offer a basic savings account, which pays 0.25% interest along with a high interest one that pays 1.05%.
But we doff our hats to RBC and BMO as both these banks allow their customers to earn 1.05% interest on the first dollar they save. So they don't discriminate against the small saver. But it would be best if you are thinking about using such accounts to do so when you have a sensible sum of money to place in to them. Anything above $1,000 would be more than acceptable.
As interest rates fluctuate so promotions are being offeredfrequently by the various banks and credit unions. This is because they are all vying for your business. Allowing those who are keen to save to take advantage of them. But you need to be aware that it might take quite a bit of effort on your part to be able to keep up with the rate of inflation. Plus you may find the effort of removing the funds from one account to the next can be quite a lot of hassle. It may well be worth considering dividing the funds between several accounts, rather than keeping them in just one.
As you can see from above there are plenty of decent options available to you when it comes to your savings, both for the long and short term.
But you need to be prepared to just through a few hoops for you to take advantage of the best rates possible on a constant basis. So don't be afraid to spend a little time comparing and reviewing what options are available to you, especially if you want to see a good return on your investment.