T-Bill

Treasury Bills Canadian & US

• Very safe, short-term investment
• Issued by provincial & federal governments
• Investors buy T-bills at discount to its face value
• Offered in terms of one month to just under one year
• Government treats the return as interest income

The Risk

• T-bills are considered a riskless investment, when they have three months or less to maturity
• Can always be sold on the open market through an investment dealer prior to maturity.

The Rewards

• Ideal investment when investor cannot afford to risk his/her money
• T -bills are a good place to park money for a short while
• Big investors with lots of cash might prefer to invest in T-Bills.(UCU account is insured only up to $100,000)

Guaranteed Investment Certificates (CND & US)

• Available in Canadian or US dollars
• One to five year deposits with financial institutions -Issued in member's name
• Cannot be sold except to the institution that issued them
• Could compound interest on interest

The Risk

• If need to access the money before maturity, investors likely lose some of interest
• Risk to have missed an opportunity to earn more on an investment.
• Risk of being too conservative

The Reward

• Pay higher rates of interest than savings accounts but less than many other investments
• Rates are higher for longer term GICs and for larger deposits

 

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