Banking in Canada can be a murky subject – one that we hope to shed some light on with a series of highly informational articles.
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NEW YORK, N.Y. – The latest on developments in global financial markets (all times local):
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Financial stocks are leading Wall Street higher after several major banks reported solid profits.
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Where to find yield in 2015
– moneysense.ca
(Photograph by Raina + Wilson)Short-term GICs and savings accounts
Approx. yield risk
1% – 2%
If you want safety without locking in for the long term and you’re willing to put up with minimal yields, go for variable or short-term investments with negligible credit risk. Two common options are to buy a one-year GIC, or just stick your money in a high-interest savings account. As it happens, both yield similar amounts these days, about 1% to 2% per year depending on the institution. Given those choices, you’re often better off salting money away in a savings account because you’re not locked in and can get at your money easily. You can also opt for a low-risk tradeable investment like a three-month Government of Canada Treasury Bill, which yields about 0.90% on an annualized basis.
For either a one-year GIC or a savings account, it pays to shop around. The big banks tend to pay the lowest interest rates (about 1% per year for both). The best rates (currently around 2%) are found at regional or niche institutions which are particularly keen for funding at this moment…
New Year, same wild ride
– macleans.ca
Welcome to 2015! It’s a brand-new page on the calendar, but if you thought this would mean a brand-new economic story, think again. Never mind the turkey and champagne hiatus, the new year picks up where 2014 left off, with more slumping oil prices, limping growth in the eurozone, flagging factories in China, and a strong dollar to the south.
In addition to watching oil prices at home, this year will be the year of watching central banks. In Canada, the U.S. and the U.K. this means waiting for signals on when rate hikes, expected this year, could begin, as growth has picked up. In the beleaguered eurozone, this is watching the central bank for signs of what stimulus could come next.
January also means looking backward, as numbers are released for December on jobs, inflation and housing, giving us a final overview on how the economy fared in the year that was.
The Bank of Canada will meet later this month for its first interest rate announcement of the year. In the mean time, you can look back at what Governor Stephen Poloz considers the biggest risks to the Canadian economy this year…
