9 common options

1. Chequing account

• Pays lowest interest of any short-termTerm The period of time that a contract covers. Also, the period of time that an…+ read full definition investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition
• Has low risk
• Usually charges a service feeService fee The fee that you pay to hold a bank or investment account. It covers services…+ read full definition
• 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 accountAccount An agreement you make with a financial institution to handle your money. You can set…+ read full definition
• 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 rateInterest rate A fee you pay to borrow money. Or, a fee you get to lend it.…+ read full definition savings accountSavings account A bank account intended for depositing funds. Pays interest and lets you withdraw cash at…+ read full definition

• Pays slightly higher interest than regular savings account
• Has low risk​
• You may have to put in a minimum depositMinimum deposit The lowest number of dollars you have to put in a bank account or other…+ read full definition
• You may have to let online banks know a day or two 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 investInvest To use money for the purpose of making more money by making an investment. Often…+ read full definition 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. Treasury bill (T-Bill)Treasury bill (T-bill) An investment where you lend money to the federal or a provincial government for a…+ read full definition

• 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

6. Money market fund

• 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

7. Commercial paperCommercial paper A kind of unsecured loan you make to a corporation. You buy the investment at…+ read full definition

• 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

8. Government bond

• Risk varies depending on the type of bondBond A kind of loan you make to the government or a company. They use the…+ read full definition
• 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

9. 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.

3 key points

Short-term investments:

1. Are lower risk
2. Tend to pay lower interest
3. May charge fees and penalties

Take action

Use this calculator to see how even small amounts of money saved add up over time.