With the economic uncertainty in recent years, many canadians are looking for safe investments that can provide good returns. However, with interest rates being low and the stock market being volatile, it can be challenging to find investments that are both safe and profitable. In this article, we will explore some of the best investment options available in canada that can provide high returns with minimal risk.
government bonds – low risk canadian fixed income investments
Government bonds issued by the canadian federal or provincial governments are considered one of the safest investments available to canadian investors. They provide a guaranteed rate of return and have virtually no risk of default. The interest rate may be low, but bonds still offer stable returns. Canada savings bonds offered by the federal government provide interest rates around 1-3% and can be easily purchased through a bank.
gics – guaranteed returns from canadian banks
Guaranteed Investment Certificates (GICs) from major canadian banks provide a fixed rate of return over a defined period, usually 1 to 5 years. The principal investment and interest earned are fully guaranteed by the issuing bank. Although interest rates fluctuate, GICs today typically offer annual returns in the range of 1% to 4% depending on the investment term.
dividend stocks – profitable canadian companies
Canadian companies that have a long history of consistent dividend payouts, such as the major banks, telecoms, and utilities, can provide Canadian investors with a reliable stream of dividend income. The share price may fluctuate but dividends often increase over time. Investing in a diversified portfolio of dividend stocks can produce annual returns in the range of 3-5%.
real estate investment trusts – income from canadian properties
Real Estate Investment Trusts (REITs) allow investors to earn income from real estate assets without having to purchase physical property. REITs invest in residential, commercial, industrial or specialty real estate in Canada and distribute profits to unitholders. Canadian REITs generally offer yields in the range of 3% to 6% annually with diversification and liquidity advantages versus directly owning real estate.
savings accounts – secure short-term savings
For short-term savings goals, the simplest option is to use a High Interest Savings Account from an online bank or credit union. These accounts offer much higher interest rates than traditional bank accounts with complete safety of principal. Current rates on high-interest savings accounts range from around 1.5% to over 2.25%.
In summary, while no investment is 100% guaranteed, the options discussed above can provide Canadian investors with a good level of safety and income. Maintaining a diversified portfolio with a mix of GICs, government bonds, blue-chip dividend stocks, REITs and high-interest savings accounts can produce moderate returns with minimal risk.