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In less than a year I'd like to purchase my first home. I just received $50K this week that I'd like to use that money for the purchase. Ideally I'd like to grow that sum before the purchase, but obviously I would hate to risk losing it.

The obvious thing I could do would be to put the money in a savings account, but I would hate a low interest rate (Ally offers just 2% before taxes - and I am in the highest tax bracket). My other thought would be to put it in a bond index fund or in a money market. In all cases I'd have to do it outside my RRSP as that's already maxed out with equities.

Again, my time frame is just about a year so I'd like to maximize return with minimizing risk. Any thoughts?

CM82
 

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There's precious little that will offer you a decent return - these are parlous times for fixed income investors.

Don't put it in bond index with this time frame. Bonds will drop in value temporarily when interest rates rise, and everyone is forecasting an increase. Bonds don't give you sufficient security of capital.

T-Bill & Money Market funds have very low rates of return presently.

About the best you can do is shop around for the best term deposit rate or savings account interest rate you can find. But if you are talking less than a year, I don't think you will beat that 2%.

http://www.cannex.com/canada/english/
 
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