Rising interest rates might be bad news for Canadians with mortgages, but it also means higher rates on savings vehicles such as guaranteed investment certificates , prompting renewed interest in the investments.
"When you compare that to a guaranteed five per cent rate with no downside risk, it becomes incredibly attractive," Poddar said. "That's what you really need to understand and speak to your adviser about. What are my options and what really suits your needs as an investor. Do you need the money in six months, do you need that flexibility. Are you OK putting a portion of your GIC into a fixed non-redeemable for a longer term," he said. Depending on what you choose, they can be cashable or non-redeemable for a term that you decide on, with redeemable options generally paying a lower interest rate.
"I think the majority of Canadians need to plan more now than they probably did in the past, especially since we’re seeing volatility in not only equity markets but also interest rate," he said.
No need to thank BoC for raising rates. They weren't thinking of seniors or savers when raising rates. Thank BoC only if they successfully bring inflation down soon, or seniors will see their savings deplete 8% a year while earning 4% or so
Higher interest rates is a bug gift from BoC to savers and seniors. Thank you thank you thank you. Another 1% hike is September please.
When rates rise mortgages rates rocket up but savings rates move upwards as slow as a glacier.
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