There are many emotion-driven reasons for buying a vacation property, or not. I like to evaluate a property purchase from a financial point of view—and here’s how.
Say a property’s purchase price is $500,000. Whether you use cash, a mortgage/home equity line of credit, or a combination, there are other costs to consider. If you purchase with cash that you could otherwise invest at a 4% return (to use a conservative assumption), there is an opportunity cost of not investing that money. If you borrowed money, despite current mortgage rates being around 2%, over the long run the interest rate is likely to go higher. On a $500,000 property, there may therefore be an initial cost of 4%, or $20,000.
Property taxes, utilities, insurance, condo fees and maintenance could easily add another 2% to 4% per year in costs…
These are current accounts offered by Ratehub partners. You can find information about additional product options and MoneySense editor’s picks further below.
Summary of the best chequing accounts in Canada for 2020
Best no-fee: Simplii Chequing Account
Best student account: Scotiabank Student Banking Advantage Plan*
Best basic accounts from a big bank: Scotia Basic Banking Account*, RBC Day to Day Bank Account
Best premium bank account for bundling: Scotiabank Ultimate Package*
Best online-only accounts: Motive Chequing Account, motusbank No-Fee Chequing Account
If you’d like more information about the features offered by each of these accounts— from great interest rates, to no fees, to the ability to earn rewards—check out the table below, or jump ahead to the detailed profiles below…
Table of Contents
What is a GIC?
How does a GIC work?
Terms and Maturity
Types of GICs
Are GICs worth it?
As the saying goes, it’s better to be safe than sorry. And for investors seeking safety, guaranteed investment certificates (GICs) can be a useful part of your overall financial plan, as they preserve your principal while returning a predictable amount of interest. Here’s what you need to know to use GICs effectively in your own plan.
What is a GIC?
A GIC works much like a loan–except you’re loaning money to a bank, instead of a bank loaning it to you, and it’s you who is paid the interest. When you purchase a GIC, the interest rate is already determined, so you know how much money you will earn from the “loan.” GICs are considered a safe an investment option, because GIC buyers are guaranteed their initial funds plus interest.
GICs are similar to savings accounts. It can feel similar to just depositing money in a bank account and earning interest…