By Gigi Suhanic
National Post
FP Money
Saturday, March 20, 2004
Question: I have $3,000 in a no-interest, no-fee U.S. chequing account. I've been keeping the account even though I live in Canada because it comes with a Visa cheque card (like a debit card) that I use when I travel and need U.S. dollars. Is there a way to make some interest on that money while still keeping it liquid?
Adrian Mastracci, investment counsel and president of Vancouver based ‘fee-only’ KCM Wealth Management, says, “That question is, What's priority one? If it's ready access to the money and flexibility, then you give up interest.”
Answer: It sounds like you want to have your cake and eat it too, says Adrian Mastracci, investment counsel at KCM Wealth Management in Vancouver: you want ready access to the money, you want to protect your principal and you want a decent return.
Unfortunately, it's hard to have all that, he says. If you want to be able to get at your cash easily -- by, for example, buying a short-term investment certificate of deposit (similar to a GIC) -- you'll have to give up interest much above 1%. Mr. Mastracci notes that's not "a major deal" when you're talking about $3,000.
"That question is, What's priority one?" he says. "If it's ready access to the money and flexibility, then you give up interest."
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