​​To keep its value, your money needs to grow enough to match inflation.  ​Saving accounts won't beat inflation but they work for your rainy-day fund.  Investing can beat inflation in the long run, but comes with some risk in the short term - that your investments can lose some of their value because of economic developments or events that affect the entire market. Wise investors will save a portion of their paycheques for the short term and invest a portion for the long term.

​Inflation in Canada is measured every month by Statistics Canada.

The latest reading (for March 2021) is 2.2%% - compared to previous March, prices during the month rose 0.7%. In the summer 2020, inflation fell to 0.1% because of the pandemic. Before COVID-19, inflation had been running at around 2%.,  


Source: https://www.statcan.gc.ca/eng/start. Consumer Price Index data, released April 20, 2021.

there are many types of investment accounts

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'Saving' is putting some of your earnings aside for later use. ​​

'Investing' is putting your savings to work - so they grow over time.  

​​​​Investing is not like gambling.​ When you invest, you help the economy grow. Companies create new jobs and innovate. People are confident and spend money.  In turn, both salaries and prices rise - it's called inflation

Investment Accounts

​​​​

Once you're comfortable with your savings account and GICs, consider opening a personal investment account and following a ready-made strategy.  You can make more money than with GICs but you'll have to take on some investment risk.

  • If you work, your employer may offer a group investment plan.  Check it out before you decide to open a personal account.


If you're an avid investor and are eager to learn, consider doing it yourself.  It's the harder when you're starting out but over time will cost you the least in fees.​ Unlike ready-made, you're doing everything yourself, from start to finish. 


Compare ready-made and DIY investing based on cost, effort, and size. How to decide?

  • How much it costs (account, product, and transaction fees).
  • ​How much effort you need to put in to set it up and keep up.
  • Minimum investment size (smallest amount of money to start). 

investment accounts

​GICs


Interest rates have dropped in response to a fall in inflation caused by the virus.

  • If you already have GICs, they will pay the original interest rate as promised.
  • When you buy new GICs in the future, you may be paid less in interest.

Let's make sure we're on the same page.

Check out our investing cheat sheet.​​

​​GICs


GICs (guaranteed investment certificates) are similar to savings accounts. You get paid interest regularly, but you can't withdraw your money whenever you want. Instead, your GIC ‘matures’ on a certain date - that's when you get your money back. 


GICs pay higher interest than savings accounts.

how it works

your rainy-day fund


​​You can use this money to pay for unexpected expenses / events (emergencies, repairs, should you lose your job, etc).​​

Use your savings account for the rainy-day money:

  • It won't earn much interest (profit).
  • But your money will always be easily accessible and you'll never risk losing it.


​​​Everybody needs a savings account. If you don't have one, get started.

​Jeff’s heart is pounding as he bolts down the busy sidewalk – the secret service is after him...

your long-term investments


You're saving for big-ticket items (like tuition, car, gap year, wedding, house, retirement) and won't need this money soon.


Since you won't need this money soon, you should invest it and earn more investment income (profit) over time than from a savings account.  But you need to:


1. Be prepared to commit to an investment for a few years. 

  • This means you won't be able to withdraw the money for a certain period of time.


2. Arm yourself for the possibility that your investments may lose some value in the short term.

  • This is called investment risk.
  • If they do, you shouldn't panic and sell.  Rather, wait patiently until they recover their value.
  • It's important to learn how much risk you are prepared to tolerate. Knowing that will help you choose investments that are right for you.
  • There are ways to reduce investment risk - you'll use them when you start investing.

What's changed because of the coronavirus epidemic?

They're multiple choice - always choose the most appropriate answer. 

Click on the diagram to find out how investment accounts work.

​This will open our video player.

your savings go into two buckets: 

 Play 'Talk Like a Banker' - FinStart's glossary game!


Each of these accounts can be opened as a registered account or as a taxable account.  You must be the age of majority to open your own saving/investment accounts as registered accounts. 


Click on the icon to join Jeff and sprint through investing. It should take you about 7 minutes.

NOT 18/19 YET?


​On your own, you can only open a savings account.​​​

You can't buy a GIC or invest until you're the age of majority in your province (18/19).  Your parents / guardians may invest for you with

joint investment accounts

INVESTMENT ACCOUNTS


  • Almost all investments declined in value initially as this is an economic crisis, on top of a health crisis. Many equity investments started rising again quite quickly and some have even reached historic highs, but there is still a lot of uncertainty in financial markets.
  • If you’re investing for the long-term and have followed the steps to reduce investment risk, the right approach is to keep investing as you set out to. Most important is not to panic and sell your long-term investments when markets decline significantly.

Each phrase can have up to five words - always choose the most appropriate answer.