Where to Put Your Money? 5 Places to Save Your Money Based on Your Goals

A chequing account is designed for depositing funds that you’ll need to spend or use to pay bills. These accounts are available through traditional banks, credit unions, or online banks. Chequing accounts typically come with a debit card for making purchases or withdrawing money from ATMs, and some may also provide cheque books.

Depending on the bank or financial institution, chequing accounts may have a monthly maintenance fee or a minimum balance requirement. When choosing a chequing account, consider these factors:

• Minimum deposit requirement

• Minimum balance needed to avoid fees

• Banking fees (maintenance, overdraft, etc.)

• ATM network access

• Added benefits, like cashback or rewards

A notice savings account combines the benefits of high interest rates (similar to a Guaranteed Investment Certificate or GIC) with moderate access to your funds. These accounts allow you to deposit money without fees, but in exchange for earning higher interest, you must give the bank advance notice (hence the name) before making a withdrawal. The longer the notice period, the better the interest rate you can earn.

Notice savings accounts strike a balance between accessibility and earning potential. High-interest savings accounts (HISAs) offer quick access to funds but often only feature promotional rates for a limited time. GICs lock in your money for longer periods, while a notice savings account provides high returns with just a short delay in accessing your funds.

Some key features of notice savings accounts include:

• Limited immediate access to funds, which results in higher interest rates

• Flexible notice periods, with interest rates tied to the chosen notice period

• Deposit limits (up to CAD 200,000 for individual accounts, CAD 500,000 for joint accounts)

• CDIC (Canada Deposit Insurance Corporation) coverage for added security

This type of account is suitable for money you don’t need immediate access to, such as saving for a vacation, a car, or a wedding. EQ Bank has a great Notice Account offer with up to 4.25% interest rate.

A high-interest savings account (HISA) works similarly to a regular savings account but offers higher interest rates. You can access your funds at any time, but these accounts are generally designed for saving, not for everyday transactions. Therefore, most HISAs don’t come with cheque books or debit cards. It’s important to review the terms at different banks to understand specific rules.

HISAs interest is usually advertised annually, but it's calculated daily and paid out monthly, allowing you to earn compound interest over time. Keep in mind that interest rates can change without notice, so it’s wise to monitor your account regularly.

HISAs are well-suited for short-term financial goals, such as building an emergency fund, saving for a vacation, or putting away money for a down payment. However, they’re not ideal for long-term goals since the returns often don’t keep up with inflation. Some HISAs also limit the number of monthly transactions or withdrawals, making them less suitable for funds you intend to move frequently.

A Guaranteed Investment Certificate (GIC) is a low-risk savings option where you lock in your money for a specific term, typically ranging from a few months to several years, in exchange for a guaranteed interest rate. GICs are ideal for people looking for stability and security, as they offer predictable returns with virtually no risk to your principal. The longer you commit to keeping your funds in the GIC, the higher the interest rate you're likely to earn. While GICs don’t provide the flexibility of immediate access like a chequing or high-interest savings account, they are perfect for short-to-medium-term goals where you won’t need to access your funds until the term ends.

GICs come in different forms, such as redeemable and non-redeemable. With a redeemable GIC, you can access your money before the term ends, but at the cost of a lower interest rate. Non-redeemable GICs, on the other hand, offer higher returns but require you to commit to the full term. Additionally, GICs in Canada are insured by the Canada Deposit Insurance Corporation (CDIC) up to certain limits, adding an extra layer of security. GICs are a solid choice for those seeking low-risk, guaranteed returns, especially for short-term financial goals like saving for a major purchase or building a secure portion of your investment portfolio.