Personal Finance

What to do with money that's sitting in my bank account?

  • Last Updated:
  • Feb 6th, 2012 9:00 am
[OP]
Newbie
Dec 16, 2011
3 posts
NORTH YORK

What to do with money that's sitting in my bank account?

Hello,

I'm a university student in Ontario, wondering what to do with the money that's sitting in my account.
I have about 20 thousand in savings in a CIBC savings account that I don't plan on touching for a very long time (I'm extremely frugal, and have all my school debts paid off).

I was wondering how I can make my money work for me? If I wont be touching the 20k for years to come (ideally only when I need to buy a home for myself, years from now) where can I invest/put it?

Something simple and not-risky would be great. ('m not a math/business major so I don't want to get confused)

Thanks! :D
15 replies
Deal Addict
Aug 28, 2010
3521 posts
1215 upvotes
Halifax
You need to be more explicit to get useful advice.


How many years until you expect to need the money? 5, 7, 10?

And what does non-risky mean? Are you not willing to lose any money? Are you willing to lose $1000? $5000?
Deal Addict
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Jan 14, 2012
1148 posts
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Woodbridge
Make an appointment with a Financial Advisor at your bank, they will be able to answer all your questions, You will probably end up throwing it into a low risk Mutual Fund maybe get 3-7% per year if you are willing to take a little risk.
Member
Aug 27, 2007
442 posts
60 upvotes
Johnny0c wrote:
Feb 4th, 2012 10:10 pm
Make an appointment with a Financial Advisor at your bank, they will be able to answer all your questions, You will probably end up throwing it into a low risk Mutual Fund maybe get 3-7% per year if you are willing to take a little risk.

Careful with going to a Financial Advisor at a bank... their main interests are in increasing their sales figures, not necessarily on maximizing your investment.
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Feb 17, 2007
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crownme wrote:
Feb 5th, 2012 12:53 am
Careful with going to a Financial Advisor at a bank... their main interests are in increasing their sales figures, not necessarily on maximizing your investment.

Nonsense, those advisors are trained professionals who specialize in maximizing their employer's profits, and their own interests, as well as your wealth being if applicable.
They had to take courses in order for them to qualify to sell you those actively management mutual funds with high management fees.
If you are sad, you should go see them because they always put on a smile no matter how bad their days were. They also ensure that tomorrows are always better than today. Therefore, you should remain invested at all times.
Most of them have University degrees in unrelated fields so they can offer you diversified theories of things aside from financial. sort of.
Deal Addict
Dec 11, 2007
1630 posts
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Markham
ElSapito wrote:
Feb 4th, 2012 8:00 pm
Hello,

I'm a university student in Ontario, wondering what to do with the money that's sitting in my account.
I have about 20 thousand in savings in a CIBC savings account that I don't plan on touching for a very long time (I'm extremely frugal, and have all my school debts paid off).

I was wondering how I can make my money work for me? If I wont be touching the 20k for years to come (ideally only when I need to buy a home for myself, years from now) where can I invest/put it?

Something simple and not-risky would be great. ('m not a math/business major so I don't want to get confused)

Thanks! :D

you'll have to elaborate on what exactly you mean by "not risky" because the definition of risk varies from person to person.

if you want to preserve your principal and define risk based on that, then the safest option is GIC ladder. since you dont need your money for some time, you can choose longer dated GICs to capture higher rates. if you view not being able to keep up with inflation as a risk, then you may want to look at some high quality dividend growth investments. you could also do a mix of both depending on what you view as a bigger risk
Deal Addict
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May 15, 2010
2001 posts
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North York
Don't invest in something non-risky, especially if you don't need that money right now. You have to take risks to make money. I would suggest something medium risk, a few stocks paying good dividends.
[OP]
Newbie
Dec 16, 2011
3 posts
NORTH YORK
Thanks for the answers!

to be more clear:
I wont be needing the 20k for another 5 to 7 years.

In terms of risk, I'm not entirely sure what is appropriate for me either. Being a student, can anyone recommend any plans that would be appropriate for me? I trust informed opinions more than my own (probably wrong) bias on what is safe/risky.

It doesn't have to be pure investment either, I'll accept any creative ways to make my money do something productive!

:) Thanks!
Member
Feb 25, 2008
318 posts
12 upvotes
I would lock it into a GIC. The place I bank, you can lock a GIC up as long as 5yrs. The longer you lock it up the higher interest rate is. If you think that the interest rate is going to be stable or you think it will drop, lock it up for 5 yrs. If you think that the interest rate will increase in a year or 2, then lock it up for 1 or 2 years. If you can lock up 20,000 for 5 years at 3%, it would earn about $3185 (depends on how the interest is compounded). If lock it up, you cant touch it without get penalized, so be sure you dont need to use it in the locked up period.
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Sep 15, 2009
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Toronto
ACC-Major wrote:
Feb 5th, 2012 1:53 am
Nonsense, those advisors are trained professionals who specialize in maximizing their employer's profits, and their own interests, as well as your wealth being if applicable.
They had to take courses in order for them to qualify to sell you those actively management mutual funds with high management fees.
If you are sad, you should go see them because they always put on a smile no matter how bad their days were. They also ensure that tomorrows are always better than today. Therefore, you should remain invested at all times.
Most of them have University degrees in unrelated fields so they can offer you diversified theories of things aside from financial. sort of.

you are truly an idiot.
Certified Financial Planner (CFP)

"Our goals can only be reached through a vehicle of a plan in which we fervently believe, and upon which we must vigorously act. There is no other route to success...."
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Jan 14, 2012
1148 posts
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Woodbridge
crownme wrote:
Feb 5th, 2012 12:53 am
Careful with going to a Financial Advisor at a bank... their main interests are in increasing their sales figures, not necessarily on maximizing your investment.

Yes, they are looking for sales figures at the end of the day, but for someone like OP that doesn't have a great deal of knowledge and I am sure isn't going to want to use his own insight through a discount brokerage, a retail FA can at least fit him into a low risk mutual fund with a decent return. ( Also without any fees or commissions) I would say that is the best bet for him, unless he wants to lock his money in for 5 years in a GIC maybe getting 3% per year.
Jr. Member
Dec 27, 2007
100 posts
4 upvotes
wesboag wrote:
Feb 6th, 2012 3:08 am
you are truly an idiot.

I think you might have missed something there.
Sr. Member
May 14, 2010
870 posts
50 upvotes
Halifax
cybo wrote:
Feb 6th, 2012 5:28 am
I think you might have missed something there.
I agree

when I read the post

at first I was like "waaaaaaaa-pssshhhhh"

but then I was like "I see what you did there"
Sr. Member
User avatar
Dec 19, 2007
571 posts
28 upvotes
Markham
RandomCDN wrote:
Feb 6th, 2012 1:24 pm
I agree

when I read the post

at first I was like "waaaaaaaa-pssshhhhh"

but then I was like "I see what you did there"

lol I had to read that twice to "see what he did there"....

OP: with your 20k, you can diversify your investments:
- GIC/bonds
- monthly income mutual funds/ETFs
- dividend income mutual funds/ETFs
- international equity mutual funds/ ETFs
- US equity mutual funds/ETFs
Depends on your comfort level of risk, divide your 20k into categories...
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Dec 28, 2004
1687 posts
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Burlington
If you have TFSA room I would move it to a high interest savings accounts somewhere. I believe People's Trust is paying 3%. I think this is a no-brainer as even a parking spot until you figure out what you want to do with the money long term. That will probably get you more interest than CIBC account and probably more than a 5 year GIC. And your money will be accessible and protected.

If you decide you want to do something else with it such as invest it in stocks/index funds/mutual funds you can get it out or transfer it within the TFSA infrastructure.
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