So it's time for me to make some decisions and it's all very confusing. I know my initial post was about minimizing tax implications, but I'm now trying to make the wisest and safest decision.
The RBC advisor recommends keeping some in my chequing account as a bit of cushion but to invest the rest into TFSA (mutual funds). She does not feel that GICs are a worthwhile investment.
With the TFSA, I like the fact that it's a tax shelter and that I have easy access to the money should I need it. But I don't like the fact that it's not secured and it's possible that what I do invest could very well go down in value which scares me.
With a GIC, at least how I understand it, I don't run the risk of losing money as the principal is guaranteed. The downside is that the money is locked in, over the long run the rate is likely lower, and the funds are not readily available if I should need it for something. But I have been reading about how some vary the maturity dates so that money is available at different times and can then be used or reinvested.
Kind of another concern I have is that it was recommended by the advisor to keep approx 3 month's salary in my chequing as a cushion but my chequing offers 0% interest. Would it not be better to put that cushion into my Tangerine savings account that will at least get me 0.1%? I do realize that I'll have to claim the interest made on investment come tax time.
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