Personal Finance

Best GIC? Prioritize TFSA?

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  • Oct 14th, 2018 3:05 pm
Jan 24, 2015
224 posts
Mississauga, ON

Best GIC? Prioritize TFSA?

So I have just been keeping my cash in a regular bank account (over $50k). At my big5 bank, the 1year GIC rate is not much higher than my savings account interest rate.

But, I am thinking of moving to a bank that offers higher interest on GICs. EQ bank looks good (seems like a trusted bank and Equitable has a lot of assets), are there any other GICs I should consider?

I also have zero in a TFSA. But thinking of (eventually) creating an account with Questrade and investing in Vanguard funds instead of a savings account. Is TFSA better to invest in than a GIC, of course there is risk with investing in equities within a TFSA...
3 replies
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Apr 5, 2016
2536 posts
Investing equities in TFSA maximizes the benefits because that's how you will potentially get the most returns and all of it be tax free.
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Sep 30, 2001
27106 posts
redflags10 wrote:
Oct 13th, 2018 7:21 pm
Is TFSA better to invest in than a GIC, of course there is risk with investing in equities within a TFSA...
You're sort of asking the wrong question. A TFSA is not an investment product but a registered account. You can invest in GICs within your TFSA, but that would be a waste in my opinion. the whole beauty of having a TFSA is the tax-free nature of the account so you would want to hold investments that will gain over time at a much better rate than super safe GICs.
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May 8, 2009
6719 posts
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OP big five offer horrible returns.

Assess your cost of living. Keep a healthy stash, but well under $50k, in liquid float. Can be HISA, and if you don't plan to withdraw prior to end of year, then TFSA no term savings account is great.

Better no term, guaranteed money are savings accounts (TFSA or not) out in Manitoba.
  1. keep a small balance in Achieva Financial
  2. IdealSavings is top rate right now, but they could be de-throwned any time
  3. next in line is SCU, but only for TFSA
  4. Hubert and AcceleRate seem to be solid contenders after that

Sign up with all of them, and then see who offers the best rates when you're ready to throw in a lump sum.

The bigger portion of your savings that you won't need for over a year should be invested in something riskier, such as stocks.
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