Interest Rate Hike: 4 Ways Canadians Should Prepare + MORE Jan 6th

(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…

Your first financial act of 2015 ought to be contributing as much as $5,500 to your TFSA (Tax Free Savings Account) if you’re Canadian. Launched at this time in 2009 and behaving somewhat like America’s “Roth” IRAs, it’s hard to believe this is already the seventh time you can contribute. By my calculations, that means $36,500 of collective contribution room plus any investment growth. That’s four years at $5,000 and now three years at $5,500: the maximum was boosted by $500 as an inflation adjustment for calendar 2013.
So if you’re one half of a couple, that means $73,000 in joint contribution room, even if you left it in interest-bearing investments paying almost zero. If you’ve been investing mostly in equities (either stocks or equity ETFs), it’s likely your TFSA had reached $40,000 or more by year-end, so it’s quite conceivable that some couples now have close to $100,000 invested in TFSAs between them.
Thursday, Jan. 1 was of course a holiday. While Friday, Jan…

The Bank of Canada is expected at some point in the year to hike interest rates, and even a small and gradual hike would affect millions of Canadians with car loans, mortgages and lines of credit.
"Definitely not going to take much of a hike to make a difference and impact your payments," says Toronto-based financial planner Jason Heath. "As soon as there's a quarter-point increase in interest rates, I think it's going to have an immediate impact on people's psychology."
A Canadian increase would likely follow an American rise in the rates and may not come until the third quarter. But by the end of the year, Canadians could be facing a 1.5 per cent benchmark rate (it's currently at 1.0 per cent) and higher borrowing costs.
1. Pay down debt
Some consumers may be tempted to make large purchases before the rates go up, but analysts advise against that, saying consumers should instead focus on paying down debt first. 
"I find that there's a feeling that because interest rates are low, you shouldn't pay down the debt — what's the point, what's the rush? But now may be an opportunity to focus more aggressively on debt repayment while interest rates are low," Heath says…