What is High Interest? 2

Wise Geek explains that choosing a high interest bank account may help you earn money on your deposits rather than having them sit in your account earning little or no interest. You may take some time comparing the interest rates offered by several different banks.

Pls See: wisegeek.net

A term deposit is a type of savings account that has a predetermined time period for investing or saving money. A certificate of deposit is an example of a time deposit because the money is deposited for a specific time frame.

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This article talks about the following:

1. Personal and Business Accounts

High Interest Savings Accounts
Canada Interest Rate

What are Personal and Business Accounts?

It is advisable keep your money is in a bank account with a company that is well-known among financial advisors for prudent management of your finances. There are banks that have several deposit account versions available so you can choose the one that's right for you.

There are two options, namely personal and business accounts:

1. Advantage Account –High-interest checking account


2. Tax-Free Savings Accounts – Tax-free growth for your savings


3. $US Advantage Account


4. Registered Advantage Account - Low-risk portion of your RRSP


5. Investment Savings Account - Investment managed by your financial advisor


6. Business Advantage Account - Excess business cash


7. $US Business Advantage Account


8. Investment Savings Account - Investment managed by your financial advisor

It is important to get in touch with your financial advisor before opening any account. If you do not have a financial advisor, bank officers can help you get the professional advice to make well-informed choices about your financial future.

Pls See: manulife.ca

What are High Interest Savings Accounts?

The high interest savings account can take different forms but one common feature is the high interest rate.

There are several reasons to opt for the high interest savings account.

1. High Interest: These accounts earn a lot more interest than the usual bank account.


2. Accessibility: With GICs, your money is locked away for a definite time (90 days to 5 years). With high interest savings accounts, you can access your money whenever you want.


3. Investing Small Sums: Buying stock or Mutual Funds are only profitable when you're investing a lot of money for a long time.


4. Safety: All of these banks are insured, meaning that this money is perfectly safe. The interest rate may go down but you will never lose any money.

When is it a bad idea to use High Interest Savings Accounts?

If you have lots of money, you should probably try your hand at stock trading or mutual funds. The high fees do not matter as much with higher sums, and you never know how much you're going to make.
What do you need to open an account?

You need a personalized cheque and valid Canadian Social Insurance Number. Some banks do not require cheques such as Scotia Bank, PC Financial, and BMO. PC Financial checking account includes unlimited free cheques so that may be another route for you.

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What is Canada Interest Rate?

The benchmark interest rate in Canada was reported at 1.00 percent recently. From 1990 until 2012, Canada Interest Rate averaged 6.0700 %. It reached an all time high of 16.0000 % in February of 1991 and a record low of 0.2500 % in April of 2009. In Canada, interest rate decisions are taken by the Bank of Canada's Governing Council. The official interest rate is the standard bank rate. Since 1996, the bank rate was set at the upper limit of an operating band for the money market overnight rate. From March 1980 until February 1996, the bank rate was set at 25 basis points above the weekly average tender rate for 3-month Treasury bills.

Economic momentum in Canada is more stable nowadays. The problems facing Canada have dissipated with U.S. economy more resilient and financial conditions slightly better. As a result, business and household confidence are improving faster than forecasted in January. Household spending is expected to remain high relative to GDP as households add to their debt burden, which remains the biggest domestic risk. Business investment is projected to remain robust, reflecting solid balance sheets, very favourable credit conditions, continuing strong terms of trade and heightened competitive pressures. The contribution of government spending to growth is expected to be quite modest over the projection horizon, in line with recent federal and provincial budgets. The recovery in net exports is likely to remain weak in light of modest external demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.

Pls See: tradingeconomics.com

Economic Forecast

Canadian economy is expected to grow by 2.4 per cent in 2012 and 2013 before going back to 2.2 per cent in 2014. The degree of economic slack has been somewhat smaller than what was anticipated in January. The economy is now expected to return to full capacity by the first half of 2013.

Article Created: 2012-07-09
Article Updated: 2013-08-05