Hi,

I am going to make my first RRSP contribution this year, and would like to invest in steady and secure investments.

The vagaries of the stock market and mutual funds are not for me.

I would like those investments where there is no chance of my investment value reducing, even if it means lower rate on return than typical mutual funds.

Can anyone provide me some guidance on what kind of investments fall in this category?

Do I have to invest through mutual funds offered by banks or can I directly buy GICs, etc. through my RRSP without paying any commissions to the banks?

Please recommend such investment options.

the immediate things come to my mind are:

Good money market instruments
GICs
Segregated funds, also known as Guaranteed investments funds where the investments capital value (not 100% though) is guaranteed by an insurance company, but the returns are less because the insurance company has to be paid a premium (and so the MERs are high for such funds). However, generally they give a better return than GICs.

Chandresh


A good advisor on our forum for such things is Mr Pramod Chopra. I have known him through this forum and found him to be knowledgeable and trustworthy.

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Chandresh

Advice is free – lessons I charge for!!

HI ,
WELL THERE ARE LOTS OF OPTION AVAILABLE .SINCE YOU ARE ACCOUNTANT YOU KNOW CAN UNDERSTAND BETTER THAN AVERAGE PEOPLE.
SO SHOP AROUND AND EXPLORE ALL YOUR OPTION.
BYE THE WAY WE PROVIDE COMPLETE FINANCIAL ADVICE .
IF YOU WANT TO KNOW MORE DROP BY OUR OFFICE OR WE WILL PAY A VISIT.
HP.

You can invest directly in GICs with banks.

However, you may want to explore some high interest investment RRSP accounts with Citizens bank, PC financial, etc. who offer interest rates similar or better than GICs with no lock in period.

Other low risk option: Bonds - if held directly until maturity then there is no risk or thru a mutual fund. In the later case the value of units will change depending on changes in interest rate.

Hi Frozen Tunda,

There are many safe investment options.

1. Cashable GICs - initial investment guaranteed 100%, money not locked in- usually low returns
2. Locked in GICs- initial investment guaranteed100%- lock -in-periods can vary from 30days, 60days, 90days, 180days, 1yr, 2yr, 3yr, 5 yr periods and so on. Returns in the 3-4.5% bracket.
3. Savings a/c. 100% guarantee of intial investment.No lock-in period. Around 4% returns.

4. Bonds. Again about 4 % returns
5. Segregated (seg)funds- 10 year holding period minimum. 100% guarantee of capital is possible with certain funds. However with every reset, the term is pushed back for another 10 years. In other words if you invest today, and by next year your investment grows 20% and you lock it in, you have to wait another 10 years for 100% guarantee. i.e 11 years from your date of investment.And so on...They are also credito proof. in case you declare bankruptcy, that money is very safe and cannot be sequestered under normal circumstances.
6. Guaranteed mutual funds (you read right!)- These have a 3, 8, 13 yr lock in and guarantee 100 % of your initial investment and lock in your profits every month w/o restting the maturity period. I.e if you invest today for a 3 year period, and by the end of the month you have gained money, this gain will be locked and you still can have your money after 3 years from the date of investment. Has been very popular since inception.
6. Principal protected notes- PPNs- new kid on the block. Guaranteed 100% capital if held to maturity- usually 5 to 7 year period.If you invest today in a 5 yr note, the maturity is exactly five years- no resetting as in seg funds. This works like an IPO, you can only buy during the offer period usually 4-6 weeks in duration, but unlike an IPO, you are guaranteed the units.

Some of the above though guaranteed invest in the stock market.

Perhaps other FAs can suggest other avenues.