Your chartered bank is offering a one-year GIC with an interest rate of two percent,and a one-year cashable GIC at one and a half percent.Term deposits are paying one percent.You have $10 000 to invest of which you feel $5000 is ample for emergency fund purposes.How should you invest your funds given the scenario above?

Question

Quizplus · Accepted Answer

Since $5,000 is already designated for emergency fund purposes, it is wise to invest the remaining $5,000 in higher yield investments. The one-year GIC at two percent offers higher interest compared to term deposits, thus $5,000 can be invested in it. The remaining $5,000 should be invested in the one-year cashable GIC to have some flexibility in case immediate cash is needed. This way, the funds are maximized for investment while still allowing for liquidity when needed.

Your Chartered Bank Is Offering a One-Year GIC with an Interest