Where to park money in Canada in interest bearing account?

[SASKFARMER]

pay off debt if it’s high interest.

buy cheap assets.

why only one year?

[jazz]

You all farm but you have a weird way of looking at risk. You let $500K in inputs sit out in the weather for 6 months and dont think twice. Anyone that farms shouldnt be afraid of the stock market.

All your crops prices are less than what they were a year ago, do you cower in the corner when canola drops $5.

And real inflation is running at double digits, even a GIC is losing money.

Econ 101. Want a nice return for 2023, buy oil.

[shtferbrains]

4.95 one year redeemable, anytime after 30 days, full interest paid , 5.25, 5 year,

Is that what they refer to as a personal redeemable?
Redeemable means 30 day min?
Does interest change if cashed early?

Or cashable?

Can anyone explain the difference?

[rodd]

Is this going to be savings in a personal name or in a corporation. If in a corporation be careful as i think there’s some kind of rule that once you earn more than 50,000 that you lose some of your business limit the following year.

If in personal name, interest is the highest tax of all investment options, consider a portion in in dividend paying stocks like Enbridge, Emera of Fortis. You don’t pay much tax on the eligible dividends they payout

It is 90/10 rule. 90% of net worth must be farm related. So if cash is over 10% do something, but there is leeway, say just holding it to buy inputs after year end. I think this is how accountant explained it to me.

[Guest]

I dont like GICs because that ties my money up for a period of time and you never know in this business when you need it.

So I stay in stocks. BNS, ENB, BCE, TRP, CM all paying more that 6% dividends right now. And you can borrow against a stock portfolio if you need to.

But I think corporate bonds would pay more than a GIC these days.

these redeemable at 4.95 are completely redeemable after 30 days and any time after for the year . interest is paid up to date of withdrawal

[Guest]

You all farm but you have a weird way of looking at risk. You let $500K in inputs sit out in the weather for 6 months and dont think twice. Anyone that farms shouldnt be afraid of the stock market.

All your crops prices are less than what they were a year ago, do you cower in the corner when canola drops $5.

And real inflation is running at double digits, even a GIC is losing money.

Econ 101. Want a nice return for 2023, buy oil.

i can control my farm , might even get my $20 for canola soon , lol

[Guest]

You all farm but you have a weird way of looking at risk. You let $500K in inputs sit out in the weather for 6 months and dont think twice. Anyone that farms shouldnt be afraid of the stock market.

All your crops prices are less than what they were a year ago, do you cower in the corner when canola drops $5.

And real inflation is running at double digits, even a GIC is losing money.

Econ 101. Want a nice return for 2023, buy oil.

but , and correct me if I'm wrong , you did say oil would be $150-$200 by now ???

[Richard5]

It is 90/10 rule. 90% of net worth must be farm related. So if cash is over 10% do something, but there is leeway, say just holding it to buy inputs after year end. I think this is how accountant explained it to me.

That is something different than the rule i brought up. What you are describing is the qualifications of farm rollover rules. If the shareholders pass away the farm company cannot pass on to kids tax free if over 10% non farming assets

[Guest]

Is that what they refer to as a personal redeemable?
Redeemable means 30 day min?
Does interest change if cashed early?

Or cashable?

Can anyone explain the difference?

no these ones are fully redeemable , but only after 30 days , 1 year term @4.95
you can withdraw a portion or all after the 30 days , up to the year term . interest is paid on the amount/day that was there @ 4.95
these are personal and incorporated , doesn't matter

[poorboy]

Thanks everyone.

I bank at BMO and in my quick online look at their website only found 3.95% GIC's which I thought was way too low, but did not know what the going rate is. Have not stopped in at the bank yet as my deferred grain checks are here in January.

Not sure what time frame to pick as I might need this money in a year if there is a recession. This is my first real savings to park, so not ready to tie it all up in stocks and bonds and whatever else there is. Hopefully I get there, like lots of the financially well off members of this site.

It will be inside of a corporations, but no issues exceeding the passive interest rules for a while.

MCfarms, is the rbcdirect site that you used for the GIC rates a bank site or a brokerage site? Thanks for posting those.