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|Year||Contribution||Estimated Interest||End Balance||Cumulative Interest||Principal|
This savings interest calculator uses your current savings and intended monthly contributions to project the value of your savings over a specified length of time, and compares it with your savings goal.
Many Canadians are faced with the question of when to start saving in life. The simple answer is as early as possible. Even if you have $10 left at the end of the month, you should start saving it, as that can multiply quickly and help you build wealth over time.
You can begin saving with a registered savings account, such as a Tax-Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP), which could also give you tax benefits. There are several types of savings and investments that you could consider, such as High-Interest Savings Accounts (HISAs), Guaranteed Investment Certificates (GICs), stocks, bonds, Exchange-Traded Funds (ETFs) and more.
There are several ways to save and grow your money. Here’s a look at some of the common types of savings and investments that you can consider.
High-Interest savings accounts offer a higher interest rate than traditional chequing accounts and savings accounts. Depositing your money in a HISA is considered a safe way to grow your money. The interest rates depend on the Bank of Canada Rate and can change without prior notice.
Usually, the interest on a HISA account is calculated by multiplying the daily interest rate with the average daily balance and is deposited into your account at the end of every month. Before investing in a HISA, you should consider not just the interest rate but also factors such as account fees, deposit insurance, transfer fees and lock-in periods.
The accounts offering the highest interest rates in Canada are:
A GIC offers guaranteed returns on your investments over a particular time period. Investing in a GIC means that you are depositing your money with a bank or credit union for a fixed term such as a month, a year or five years. The interest rate varies across financial institutions and generally increases with the length of the term of the deposit. You may be penalized for withdrawing your money from a GIC before the end of the term.
GICs are considered to be low-risk investments, and are ideal for investors with a low risk appetite. You can select a GIC based on criteria such as fixed or variable interest rate, cashability and term length. Listed below are the best GIC rates available in Canada.
Canadian Western Bank
By buying a company’s stock (also referred to as share), you essentially become a partial owner of the company. Stocks of a company can be bought and sold on stock exchanges where the company is listed. Owning a certain class of a company's stock also entitles you to the profit earned by the company. Part of this profit is usually paid out as dividend.
Stocks can be traded through a trading platform. Trading in individual stocks can be risky; however, risk-averse individuals can consider investing in relatively lower-risk options such as blue-chip stocks or defensive stocks. Listed below are the five highest-dividend stocks in Canada.
|Name||Dividend Yield||Price||Market Cap||Sector|
|Dominion Lending Centres Inc. - DLCG.TO||5.85%||$2.09||$98.922 Million||Finance; Banking|
|Manulife Financial Corporation - MFC.TO||5.62%||$26.12||$47.401 Billion||Finance; Insurance|
|Mullen Group Ltd. - MTL.TO||5.26%||$13.69||$1.214 Billion||Industrials; Transportation|
|Whitecap Resources Inc. - WCP.TO||4.92%||$11.73||$7.142 Billion||Energy; Oil & Gas Exploration and Production|
|Cogeco Communications Inc. - CCA.TO||4.9%||$63.22||$2.82 Billion||Media; Telecommunications|
*Information Updated : September 20th, 2023
Mutual funds are the most common type of investment in Canada. In this type of investment, resources from multiple investors are pooled together to buy securities such as stocks, bonds, currencies and commodities. A mutual fund groups all these assets in a single fund and is thus a great way to diversify your investments. Mutual funds are managed by professional fund managers, who manage the buying and selling of securities within the fund. Mutual funds usually require a low initial investment. They are liquid as they can be redeemed on any day at the net asset value (NAV) at the end of that trading day.
|Name||1-year return||3-years annualized return||5-years annualized return||10-years annualized return||Underlying assets||MER||Load|
|Canoe Energy Alpha Fund*||87%||35%||25%||NA||Energy Equity||None|
|Ninepoint Energy Fund||78%||54%||18%||7.5%||Energy Equity||None if held > 20 days|
|Fidelity Global Value Long/Short||73%||NA||NA||NA||Unconstrained||None|
|Altema Diversified Equity Market Neutral*||50%||4.9%||NA||NA||Unconstrained||None|
|Wealhouse Lions Bay*||43%||29%||NA||NA||Unconstrained||None|
*Information Updated : August 18, 2022
An ETF, like a mutual fund, is also a type of investment fund that pools the resources of multiple investors and invests in a basket of securities such as stocks, bonds and commodities. The difference is that ETFs are traded on the stock exchanges throughout the trading hours, in the same way as stocks. Similar to stocks, ETFs also have a ticker symbol, and their prices also change throughout the day.
The risk level of the assets contained in an ETF determines the risk level of the ETF. ETFs are considered to be a transparent form of investment and have low upfront costs. Listed below are the best-performing Canadian ETFs based on 5-year risk-weighted return.
|Ticker Symbol||Benchmark Tracked||Category/Sector|
|HQU||2x NASDAQ-100||1.49%||1.2M||$190M||-48%||-26.2%||62%||154%||209.57%||Passive, non-financial|
|ZQQ||Nasdaq 100 Equity Hedged||0.39%||105K||$1.4B||-25%||-8.5%||47%||94%||166.17%||Passive, non-financial|
|VFV||S&P 500||0.09%||131K||$4.63B||-13.9%||6.1%||34%||73%||159.3%||Passive, broad index|
|VUN||CRSP US Total Market||0.16%||42.8K||$3.81B||-15%||0.9%||30.6%||67%||146.21%||Passive, broad index|
|XUU||S&P Total Market||0.07%||42.4K||$2.03B||-14.5%||2.9%||31.1%||67%||146.21%||Passive, broad index|
|XIU||S&P/TSX 60||0.18%||5.122M||$11.7B||-8.5%||12.4%||28.4%||50%||138.68%||Passive, broad index|
|COW||Manulife Asset Management Global Agriculture||0.72%||13K||$376M||3.5%||10.3%||41.2%||65%||134.06%||Passive/Agricultural|
*Information Updated : September 19th 2022
REITs are a great option if you want to invest in real estate without having the hassle of managing a property. At the same time, investing in real estate in the traditional way takes a lot of capital; but with REITs, you can start investing in real estate for much less.
REITs are basically real estate companies that use the investors’ money to buy and manage properties and distribute the income earned from the properties back to the investors. Similar to stocks, many REITs in Canada are also traded on the Toronto Stock Exchange (TSX).One can invest in REITs through a REIT mutual fund or a REIT ETF. Listed below are the best Canadian REITs.
|Smartcentres REIT||SRU.UN||Retail||$30||$4.35 Billion||6.15%|
|Artis REIT||AX.UN||Commercial (excluding Residential)||$11.5||$1.5 Billion||5.19%|
|Riocan REIT||REI.UN||Retail||$21.9||$6.93 Billion||4.39%|
|H&R REIT||HR.UN||Commercial||$16.17||$4.68 Billion||4.25%|
|Granite REIT||GRT.UN||Industrial||$89||$5.86 Billion||3.36%|
*Information Updated: August 02, 2022
Listed below are the best Canadian REIT ETFs.
|Annualized Return %|
|Name||Ticker||Last Price||Yield (%)||YTD Return (%)||1 Year||3 Years||5 Years|
|iShares S&P/TSX Capped REIT Index ETF||XRE||$16.04||4.19||−21.06||−19.29||−3.03||4.06|
|CI Canadian REIT ETF||RIT||$15.59||5.28||−23.69||−21.30||−1.65||4.51|
|BMO Equal Weight REITs Index ETF||ZRE||$21.34||5.22||−20.68||−19.12||−0.41||5.88|
|Russell Investments Real Assets ETF||RIRA||$17.21||5.19||−11.84||−7.71||NA||NA|
|Vanguard FTSE Canadian Capped REIT Index ETF||VRE||$28.36||4.04||−24.67||−22.85||−3.54||2.6|
*Information Updated: November 17, 2022
Purchasing a bond essentially means loaning money to the government or a company, for which they pay you interest at a set rate. Government bonds are considered to be a risk-free form of investment; however, corporate bonds usually pay a higher interest. The return on a bond is called bond yield, which can be used to compare bonds. Bond maturities in Canada usually range from a month to 30 years.
T-Bills are another low-risk investment option available to Canadians. These are short-term debt securities, usually sold in denominations of $1,000. In Canada, the value of a T-Bill can range up to $1 million, and it needs to be held for a fixed term, which could range between a month to a year. T-Bills are said to be sold at a ‘discounted value’ and are subsequently redeemed at their face value. The difference between the two is what you earn.
The savings and investment streams you choose can largely depend on your risk appetite and knowledge of available financial products. You should always research a product before investing in it to avoid any surprises later. If you are risk averse, you can consider investing in low-risk streams such as HISAs, GICs or government bonds. Even if you start by investing a small amount, your investments have the potential to grow exponentially as the interest compounds over time.