Canadian High Interest Savings Bank Accounts

I have a number of these as the "cash" portion of my portfolio. They consistently beat the net gains of most money market funds I've seen after you deduct fund management expenses and other fees. Bonds? A waste of time in my opinion; particularly Canada Savings Bonds.

You can get even higher rates if you're willing to lock into what the online banks call a "GIC" (not really a GIC, but they appear to work the same way from the account holder's perspective). Online "GIC's" are really just online savings accounts where you agree not to withdraw the funds for a specified term. Most online banks have terms as short as 90 days and as long as 5 years. If you were lucky and had the cash, you would have been able to lock into a 5-year online "GIC" from Achieva Financial a year ago at a 5.55% APY. You can find rates in the 4.0-4.5% range today. Most of the online banks allow you to redeem the "GIC" early at a reduced interest rate (except Achieva which requires you to "lock in" for the duration of the term).

I'm not a financial planner, but if it were my money, I would either lock in NOW, or just sit on my money for another year or so. I don't think we've hit the bottom of the interest barrel yet, especially condidering the recent freefall in the US Fed's lending rate, and the subprime housing debacle in the US. SEE WHAT THE ILLUSION OF WEALTH GETS YOU??? A BANKRUPTCY. LIVE WITHIN YOUR MEANS!

(okay, I'm off my soap box now)