High interest rates explain a lot of the money pouring into guaranteed investment certificates these days, and so does the safety factor. But some conservative investors don’t find GICs to be the ideal fit. One such person got in touch recently for some thoughts on how to park some cash in “something that is very safe and secure right now.” GICs were rejected because of deposit insurance limits. What about treasury bills or exchange-traded funds holding T-bills, this reader asked.
T-bills issued by the federal government are not deposit-insured, but they’re backed by Ottawa’s AAA credit rating from DBRS and the power to increase taxes if needed to meet its debt obligations. Arguably, a T-bill offers a slightly lower risk profile than a GIC because there’s no risk of uncertainty caused by the collapse of a GIC-issuing bank. The issue with T-bills for investors is that they must be purchased through online brokers who may not offer the best pricing. The more you pay for a T-bill, or bond, the lower the yield you ge
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