9 common options
- 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
- 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 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 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. 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
7. 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
- 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
- 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:
- Are lower risk
- Tend to pay lower interest
- May charge fees and penalties
Take action
Use this calculator to see how even small amounts of money saved add up over time.