Comparing short-term investments

​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

• 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
  

• 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.