Real Estate Investment Canada

Should I move my money from my savings account?

I am a 22-year-old student beginning my PhD next year. I have recently acquired ~$18,000 that I do not need at the moment. It is sitting in my savings account right now earning 4.25% interest. I am not planning on marrying or buying a house for at least another 5 years, but I would like the money to be somewhat available just in case things change. I am more concerned with ensuring that I don't lose money than with it growing significantly. Should I keep it in the savings account or look into mutual funds, stock market, etc? Canada Savings Bonds currently have a lower interest rate than my savings account, so that doesn't make sense to me. Thanks for your input.

Public Comments

1. You could put it into CDs in chunks if the rates are higher than your savings account. Find a savings/money market account that pays better interest. I know ING Direct is paying @5% right now. If you don't mind risk and tax consequences than invest in low cost mutual funds, index funds or stocks.
2. i would advise you to ladder it in to cd"s with expire dates of 12, 18, 24, 26, and 32 months that way should the need arise you will have a hunk of money coming in every 6 months and when they do come due if you do not need the money roll it over and if possible add to the investment!!!
3. The question is of a rhetorical kind. If only the one knows the correct answer :-) Your choice will depend on the level of risk you are ready to take. My personal opinion although is that 5 years is not long enough for mutual fund unless you take a low risk package managed by bank. Such a package may not bring you more then your saving account though. And as for 4%, keep in mind that inflation is around 2% and remaining 2.25% will bring you $405 - ~25% tax = $300. By keeping money on saving account you simply protect them from devaluation.