Investing

How much % interest would make you put all your money there

  • Last Updated:
  • Feb 3rd, 2020 2:11 pm

Poll: How much % interest would make you put all your money in a bank account

  • Total votes: 25. You have voted on this poll.
5%
 
7
28%
6%
 
3
12%
7%
 
3
12%
8%
 
3
12%
9%
 
0
0%
10%
 
7
28%
11%
 
0
0%
12%
 
1
4%
13%
 
0
0%
14%
 
1
4%
[OP]
Newbie
Jun 5, 2017
71 posts
76 upvotes
Vancouver

How much % interest would make you put all your money there

Just interested. assume 0 risk.
7 replies
Sr. Member
Jun 28, 2018
733 posts
483 upvotes
Toronto
By nature of CDIC protection currently $100,000 of your deposit into the account would be risk free. Theoretically, if "all your money" went beyond that $100k, then the excess would be at risk if the bank went under and you may be bailed in or maybe lose all of the excess amount.

As for the interest rate offered, there would be external factors. Why would the banks offer rates significantly higher from now? Extreme inflation and central banks raising rates to tame it a la 1970s Volcker Shock causing financial assets outside of cash to crash?

However, conversely, if markets tanked and if dividends did not get cut, you would be compensated for risk of holding a company's shares by riding dividend yields from the lowering share prices. That is as long as you are deploying new money and not getting crushed by your existing holdings. Also, assuming it doesn't cause an economic deflation causing bankruptcies.

Example:

Current: $10 share @ $1.00 dividend per year = 10% yield

After rates rise: $5 share @ $1.00 dividend per year = 20% yield
Last edited by johnnychi on Jan 31st, 2020 8:27 am, edited 2 times in total.
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:
Deal Addict
Mar 22, 2010
2527 posts
617 upvotes
meaningless post. If assumed zero risk, of course I'd put my money in 14% account. This is fantasy even 5% zero risk is.
Deal Addict
Jul 15, 2009
1708 posts
804 upvotes
If it's paying 5%, it's not risk free.
Deal Addict
Dec 4, 2016
1750 posts
801 upvotes
2% above government of Canada bond rate, assuming CDIC insured. I can mortgage my house at about 1% above Government of Canada bond, so 1% reward for having faith on CDIC seem like a reasonable deal to me.
Member
May 5, 2016
343 posts
323 upvotes
If we're literally talking about zero risk, even 5% is a slam dunk.
[OP]
Newbie
Jun 5, 2017
71 posts
76 upvotes
Vancouver
Im asking the lowest % that you would do it.

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