Posted on: 28-10-10 09:32:55
Can anybody suggest me a riskfree investment options which gives 3-4% return ? At the same time i do not want funds to be locked for fixed term as I may need the funds as a downpayment in near future. Any suggestions is appriciated.
Hi, welcome back to Earth....how is Jupiter this time of year? 
"near future" is a relative term....are we talking earth years or jupiter years?
Anyhow, 5 year GICs are paying 3% right now.
There are essentially two "risk-free" investments - GICs or Govt. bonds.
In your case, GICs are better because govt. bonds maturing in 5 years are yielding about 2%
You can of course go up on the risk curve to chase higher yields, such as REITs, former trusts, dividend stocks, etc.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Thanks a lot for prompt reply. For me near future is any time between 6 months to 2 years. can you explain me in detail how other options like REITs, former trusts and dividend stocks works as i don't know abcd of all this investments.
Since your time frame is less and you would need this money for House buying, you should not be looking for dividend stocks, mutual funds or similar investments. The best scenario for you could be to put in RRSP savings account with ING or ICICI or any bank giving 2% to 3% return. This way your money would be absolutely safe and would also get you tax refund based on your marginal tax rate and you can use the same as down payment for your house under Home Buyer Plan for first time home buyers. The only conditions are that you have to be first time home buyer and have RRSP contribution room.
Good Luck.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Originally posted by metallurgy
Can anybody suggest me a riskfree investment options which gives 3-4% return ?
I am more than happy to give 3-4% in return
ok for you 5% arrgh..50% Quote:If we are talking about 6 months to 2 years, then as others have already said, you cannot take any risk.
Originally posted by metallurgy
Thanks a lot for prompt reply. For me near future is any time between 6 months to 2 years. can you explain me in detail how other options like REITs, former trusts and dividend stocks works as i don't know abcd of all this investments.
A 2 year locked-in GIC will fetch you a max. of 2%.
If you don't have a specific date in mind, then you cannot lock in your GIC.
Just deposit it in a savings account.
Inflation is a risk for everyone, but the CPI inflation rate does not matter to you.
What matters is the housing prices.
They may keep going up or fall.
If it falls, you wouldn't have lost any money by keeping it in a savings account.
If housing prices rise, then you lose purchasing power and will have to make up the difference with further savings.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Hi metallurgy,
GICs are the safest investment in your situation. You can invest the funds in a RRSP plan if you have contribution room available and buy non-redeemable escalating rate GICs. I am advising this looking into the fact that you may need the funds in near future for making Home Buyer's Plan (HBP) withdrawal. The non-redeemable escalating rate GICs would provide you handsome returns and if you break them in between term for doing HBP withdrawal you do not loose interest because HBP is federal government plan and financial institutions have to abide by government regulations. That could be a win-win situation for you.
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He who has not acquired one of the following: religious merit (dharma), wealth (artha), satisfaction of desires (kama), or liberation (moksa) is repeatedly born to die
