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Old 03-25-2016, 08:30 AM   #1
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Join Date: Apr 2004
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Default High Interest Savings vs GIC Question


I am working with my Mom to help her with her retirement portfolio, and could use some advice.

My Mom wants to have a portion of her TSFA which isn't tied up in ETFs, stocks, bonds or any similar product and where she knows the principal is safe. Right now she has a high interest savings account which makes 1.75% interest yearly and of course pays interest monthly which compounds.

Knowing she won't have to touch the money for at least a year she was debating moving to a GIC. She found a 1 year GIC at her bank that pays 2.05% interest. The GIC's interest is calculated monthly, and paid annually.

In my mind it seems that staying with the savings account with maximize her returns (even if it's ever so slightly) because the interest is paying out and compounding monthly.

I'd love your thoughts on this.
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