Where to park money in Canada in interest bearing account?

[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.

[sumdumguy]

BMO has an investment guy who you goto. He has a wide range of products. I just bought BMO Trust and BMO end of November. 5.08 and if I had waited a couple of days, probably could have got a bit more.

[STR1]

My advice is find a good financial advisor and work on a long term plan and stick with it.
Sounds like a good time to start a plan if you have extra cash around,

[shtferbrains]

My financial advisor is very conservative.
Maybe he can see I don't have enough money to risk.
He has been very good at saving tax.

[mcfarms]

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.

The rates I posted were off the RBC direct investing site that is the "do it yourself" brokerage at RBC they also have full service divisions, you're at BMO so their version is BMO investor line.
Some people prefer to have an advisor some don't. Some have both products, you pay for help with a full service broker so that help has to pay for itself and some do some don't.

[Partners]

Buy iron.
It goes up 10% or more every yr..
With no end in site..

[Rareearth]

Im havei g trouble understanding the desire for GIC
If inflation is ... say 10% and GIC interest return is 5% then your real rate of return is Minus -5 %, this is the real cost!

A farmer who doesn't know where to spend, or how to prioritize dollars for the farm?
Unbelievable , pay down the debt, or maybe your have well balanced short, Medium, and long term debt with low interest rates? If this is the case reinvesting back into the farm for land or equipment is always a good medium or long term move.
Or think of it as, invest in your self, a work life balance, farming is very tough in so many ways.
Whats your most import piece of equipment, or is there not a dream? Pay off the operating line of credit?

Farmers should invest in them selves, or actual farm assets, and at a minimum agricultural stocks (nutrium, agrium, Enbridge, etc)

Equipment and farm assets are going to be traditionally expensive for many years, waiting for the prices to come down can be a fools game,

[biglentil]

Buy iron.
It goes up 10% or more every yr..
With no end in site..

The banks used to be a safe place to park your fiat, but you're right safest place might be parked in your shop. Remarks at a recent Nov 2022 FDIC (Federal Deposit Insurance) meeting were concerning.

FDIC quote:

"You don't want a huge run on the institutions, and, and they're going to be". The words 'bail in' mentioned many times. Seems they are expecting an event much larger than 2008. Here is a short clip, but this fellow was not the only one at the FDIC raising red flags over the banking industry. We have CDIC in Canada that protects deposits up to $100000, but last I checked they can only protect up to half a percent of all deposits on the books.

[Guest]

Buy iron.
It goes up 10% or more every yr..
With no end in site..

yep, wasn't long ago the experts were saying iron was a waste of time
all this old junk, (other than combines) sure keeps its value
mind you its "trudeau bucks" now

[mcfarms]

Im havei g trouble understanding the desire for GIC
If inflation is ... say 10% and GIC interest return is 5% then your real rate of return is Minus -5 %, this is the real cost!

A farmer who doesn't know where to spend, or how to prioritize dollars for the farm?
Unbelievable , pay down the debt, or maybe your have well balanced short, Medium, and long term debt with low interest rates? If this is the case reinvesting back into the farm for land or equipment is always a good medium or long term move.
Or think of it as, invest in your self, a work life balance, farming is very tough in so many ways.
Whats your most import piece of equipment, or is there not a dream? Pay off the operating line of credit?

Farmers should invest in them selves, or actual farm assets, and at a minimum agricultural stocks (nutrium, agrium, Enbridge, etc)

Equipment and farm assets are going to be traditionally expensive for many years, waiting for the prices to come down can be a fools game,

His situation is not yours, yours is not his.
He asked a question he was given an answer.

some people who have too much debt, some people who have too much cash.
they both come with their own set of problems

The race is never the same for any of us, the answers therefore will always be different.

[fjlip]

In my old days we heard...."it only costs 10% more to go first class", if 10% was interest rate.

Cash is bad in Corp, so yes if it's there, pay the loans. Win twice.

Used Combines and new augers only deals....other than that none available, or at least a year away.

Retiring auctions are hitting the lottery.

Auction companies making HAY.