2023-05-16 04:00:00
What is currently the “best” anytime cashable investment to temporarily invest your cash in? These are the traditional “savings bonds” of Quebec.
On sale until 1is next June, the new vintage of savings bonds offered by Épargne Placements Québec (EPQ), the financial arm of the Québec Ministry of Finance, will yield a return of 4% for the next 12 months from June 1is June to May 31, 2024.
This is the “biggest” yield offered for twenty years, more precisely since the June 2001 issue with a rate of 3.35%. This was when the internet bubble burst and shook the whole world. At the peak of the said bubble, in the summer of 2000, Quebec savings bonds yielded 4.75%.
Worse at the bank
Today, with a rate of return of 4.0%, the new vintage of savings bonds is far ahead of the cashable investments of its banking competitors.
As proof, three examples. Desjardins Group offers a return of 1.75% on its one-year redeemable term deposit. At the National Bank, they are a bit more generous by offering a 2.0% return on the 12-month redeemable GIC.
Even better with the Royal Bank, which offers a redeemable GIC at 3.25%.
Note that you must keep your redeemable GIC for more than 30 days to be entitled to receive interest.
Other banking institutions could offer a little more than Desjardins or National Bank on said short-term redeemable GICs, but one thing is certain, Épargne Placements Québec is currently the leader in this type of financial product.
FLEXIBLE
Québec savings bonds are an extremely flexible financial product.
They are redeemable daily, at their full value, without penalty.
They offer a guaranteed minimum interest rate, set annually according to the market for each year of the ten-year term.
The interest rate of previous issues is automatically revised according to the rate offered on the new vintage.
This means that the “old” savings bond issues still in force will also yield 4% from the next 12 months.
ACCESSIBILITY
Investors can benefit from this investment from a minimum purchase amount of just $100. This makes it extremely accessible. Savers have the choice of receiving “simple interest” collectible annually or “compound interest” collectible upon receipt of the investment or at the end of the term.
Of course, savings bonds are eligible for the multitude of accounts offered by Épargne Placements Québec: investment savings account, TFSA, CELIAPP, RRSP, RRIF, LIRA, LIF.
Savings bonds are part of the range of savings products managed by Épargne Placements Québec. The total outstanding amount of these financial products now exceeds the $13 billion mark.
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