| If you are lucky enough to have a bit of disposable | | | | return is guaranteed over a fixed period of time. |
| income, you are doing the right thing by researching | | | | Guaranteed Investment Certificates are relatively |
| ways of saving or investing your money. By reading | | | | low-risk investments, and thus yield smaller returns |
| about the different options available to you, you'll be | | | | than that of stocks, bonds and mutual funds. Within |
| able to make an informed decision and make the | | | | the category of GIC's, there are lower-risk options |
| best possible choice for you and your money. How | | | | and higher-risk options; however, GIC's in general are |
| you decide to save and/or invest your money will | | | | considered low risk because even if you earn less |
| depend on many variables. Some of these include | | | | interest or jeapordize your access to interest earned |
| how much money you've got to work with, how | | | | by withdrawing early your initial investment is |
| much time you've got to work with and your | | | | guaranteed. These safe and secure Canadian |
| all-important tolerance to risk. After reading the brief | | | | investments earn interest at a fixed rate, variable |
| overview of mutual funds, Guaranteed Investment | | | | rate, or based on a market-based index. |
| Certificates (GIC) and savings accounts below, it is | | | | Savings Accounts |
| advisable to discuss all your options with a personal | | | | Savings accounts are very safe and flexible places in |
| finance advisor who can assess your situation on an | | | | which to basically store your money. You can open a |
| individual basis. | | | | savings account at any bank and with as little as $25. |
| Mutual Funds | | | | You will have access to your money at all times, and |
| A mutual fund is an investment where the money | | | | depending on how much you keep in your savings |
| invested by many investors is pooled and then | | | | account at any given time, may not even have to |
| invested in a wide range of investments. The | | | | pay any bank fees. The downside of keeping money |
| investments typically included in mutual funds include | | | | in a savings account is that your cash will earn little to |
| stocks, bonds, securities, short-term money | | | | no interest. Interest-bearing savings accounts earn |
| instruments and others. Mutual funds are generally | | | | very little interest compared to Guaranteed |
| considered to be pretty safe as they are highly | | | | Investment Certificates or mutual funds. However, if |
| diversified. Each mutual fund will have a manger that | | | | you feel that you will (or may) need access to your |
| is charged with trading the fund's assets regularly. | | | | cash during the short term, this is a great and safe |
| This person's job is to maximize the rate of return | | | | place in which to keep your savings. Many people |
| for all the investor's whose money is invested in the | | | | start saving with this type of account then transfer |
| fund. The benefit of investing your money in mutual | | | | lump sums to other investments such as GIC's or |
| funds is that you can start with as little as $25 dollars | | | | mutual funds. |
| and contribute to your fund on a regular basis. This is | | | | The Verdict |
| a great way to get started in investments and to | | | | Now that you know a bit more about GIC's, mutual |
| grow your money even when you do not have | | | | funds and savings accounts, you are better prepared |
| access to a lump sum. | | | | to talk to your financial advisor about what's best for |
| Guaranteed Investment Certificates (GIC) | | | | you. If you don't currently work with a financial |
| A Guaranteed Investment Certificate, or GIC is a | | | | advisor, speak with a customer service |
| type of Canadian investment in which the rate of | | | | representative at your bank. |