Interesting returns on safe investments

Attractive returns on safe investments


In this year 2022 when the Stock Exchange has so far suffered heavy losses ranging from 10 to 25% and when the market for negotiable bonds has melted by 11% to 20%, many savers will appreciate the sharp rise in the yield of conservative investments, such as guaranteed investment certificates (GICs).  

Following yesterday's 0.75% increase in the Bank of Canada's key rate, which now stands at 3.25%, the return on GICs and other term savings products has reached a relatively high level, like 4 to 5%, depending on the terms. 

This is definitely a good time to reinvest, if this is your case, a portion of your cash, and thus obtain in return a attractive return, while obviously running no risk.  

However, the return on these risk-free investments may well increase further over the coming months.  < /p>


In its message yesterday, the Governing Council of the Bank of Canada made it clear that it will need to continue raising the policy rate given the outlook for inflation. The Bank of Canada wants to bring inflation back to its target of 2.0% while in July, inflation galloped to 7.6%.  

If the Bank of Canada's key interest rate continues to rise, this will drive up the yield on term savings, deposits and GICs.  


Never mind, let me remind you of the proverb: “A hand is worth two”. As the Wiktionary so aptly puts it: “Better to opt for something that you can obtain immediately rather than something of more value, but which you are not sure of obtaining. »  

This is why I invite you to take into consideration the sharp increase in the return on risk-free investments that has occurred in parallel with the rise in the Bank of Canada's key rate. 


In July 2020, in the midst of the COVID-19 pandemic, Épargne Placement Québec offered us a yield of barely 0.85% on its interest rate bonds. fixed for 1 year, then 1% on the 3-year term and 1.2% on the 5-year term.  

Today, Épargne Placement Québec is offering us 3.35% on its 1-year bonds, i.e. 4 times more than in July 2020. Its 3-year bonds are yielding 3.45% and those with a 5-year term are yielding 3.45%.  

Épargne Placement Québec, however, appears to be cheap when its returns are compared to those of banking institutions.  < /p>


With the big banks (RBC, Scotia, BMO, National, CIBC, TD) you can get 4.2 % over 1 year; 4.5% over 3 years; 4.6% over 5 years.  

With the Desjardins caisses, you could get 4.25% for the 18-month term or 4.40% for the 34-month term .  

Credit Unions (such as Accelerate Financial, Outlook Financial, Achieva Financial, Steinbach) raise the offer up to 5% for the 5-year term. 

Attractive returns on safe investments