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Putting Away Money In The Short Term V.NotAFinancialGuru

Discussion in 'Reality Check' started by Hiltzy, Feb 9, 2009.

  1. Hiltzy

    Hiltzy
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    I want to start putting a way some money, something that is locked up for maybe a year and a half. Is an RRSP good in the short term? I want something that I can put money into, but not take out easily (IE: A bank savings account would be too tempting to dip into).
     
  2. infatuous

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    You should use a tax free savings account. If you use an RRSP, you'll get dinged when you take it out.
     
  3. billybob

    The Schooner, the better.

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    TSFA for sure.
     
  4. dpwu32

    Trash elf

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    What are you saving for?

    If it's school, or buying your first home, go the RRSP route. You can withdraw from an RRSP one time without being taxed if it's to buy your first home. There is a similar program set up for withdrawing for school without being taxed, but I'm not overly familiar with exactly how it's set up.

    If it's not for either of those, I'd suggest maybe GIC's or bonds within a TFSA...
     
  5. hank

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    Send me your money. I'll give it back when you need it :hsugh:
     
  6. Hiltzy

    Hiltzy
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    Im finance inept....more splaney please.

    Edit. Not saving for a house or anything like that. Starting to put money away for Wedding
     
  7. Snide

    Go Habs Go!

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  8. dpwu32

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    GIC's are Guaranteed Investment Certificates. You can walk into pretty much any bank and get them. They're relatively risk-free, and the interest rate is guaranteed (Both of which are probably a good idea if you're only investing for a year or two.)

    Generally they're only cashable/redeemable on a yearly basis, but some are available that are redeemable at any time.

    I'm no expert on them, so maybe someone else can elaborate, but that's the basics.

    The TFSA is the Tax Free Savings Account. Pretty much just a new savings account through which you can own GIC's, bonds, mutual funds, stocks, etc, and the interest that you earn on your money is tax free. Depending on how much money you're hoping/planning to save, and what kind of interest rate you hope/plan to get, it's probably worth looking into.
     
  9. Hiltzy

    Hiltzy
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    So for a GIC, you would be talking about an inital investment and then let it grow...as opposed to monthly deposits.....
     
  10. dpwu32

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    Again, I'm not an expert, but I'm pretty sure that's how the majority of them work. I think you can get them as low as $500, but I'm pretty sure you've got to pony up $500-$1000 minimum at a time...
     

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