Hi all, I’m new to investing (just turned 18 this year).
I work a full time job and want to start saving and growing my money.
My current portfolio consists of a variety of sources, including GICs, managed ETFs, and cryptocurrency. For ETFs and crypto, I deposit a portion of my paycheque into the respective exchanges as part of a dollar cost averaging strategy. But for GICs, I’m a little confused.
I have one GIC already for a 13 month term, but I’m not sure of the optimal contribution strategy. Should I be buying a new GIC each month with a portion of my paycheque, or maybe accumulate funds annually and then put them into new GICs?
Congrats on being both lucky and wise enough to be able to do this at such a young age!
I would currently advise against GICs at all unless you’re getting really good rates. If you’re willing to bounce your money around, you can get ~5.5% (give or take 0.5% or so) in savings accounts on new deposits. Tangerine and BMO for example have rotating promotions that you can sometimes take advantage of around those rates, and your money isn’t locked away.
If you don’t feel like moving your money around as much, some online banks are offering ~4% interest rates on their savings accounts, and your money isn’t locked in. I think some even offer TFSAs for those, if that’s what you’re after.
imo, you probably don’t need GICs. After they mature or whatever (you get the money because they term is done), see if there are better places to put your money.
I’m currently using Wealthsimple for 3.5% APY on my savings and my bank gives me 4.9% for GICs. I really just wanted a hedge against potential market disasters. Even though I have conservative and balanced ETFs, they could still collapse. Although, so would the Canadian dollar I suppose.