Money

Best High Interest Savings Accounts in Canada

August 4, 2022 by Ben Leave a Comment

All of us have long term financial goals. Everybody has something a little more expensive they’ve had their eye on and want to save up for. Sometimes you may just want to grow money that you have but aren’t spending. A high interest savings account is one of the best ways to do this. High interest savings accounts are risk and hands free, all while earning you interest on your money to help you do whatever you can dream.

With the current worldwide economic situation improving as we near the end of the global pandemic, interest rates are rising at many Canadian banks. This means that it is a great time to put your money somewhere where it can appreciate. There are things you have to watch out for though. Many banks’ marketing strategies involve a tactic which temporarily boosts the interest rate of a given HISA (High Interest Savings Account) to make it more desirable. After the first few months the rate decreases to the usual and comparatively miniscule interest percentage. As long as you know that the normal interest rate is still good, you won’t be unpleasantly surprised.

You may be asking yourself why people have regular savings accounts if the high interest counterparts earn more interest. High interest accounts oftentimes have some drawbacks or conditions when compared to normal savings accounts. These can include a limited amount of monthly withdrawals or a minimum account balance.

TD High Interest Savings Accounts

TD has two accounts that fall under high interest. The first offers an interest rate of 0.05% as long as your balance is over $5000. The second account is called the ePremium savings account. It offers 0. 5% but your balance has to be double at $10,000. If you have the ability to maintain such a balance, this account could work for you. The account offers unlimited free online transfers to other TD accounts. Although transaction fees are high with the regular high savings account, if you plan on keeping the money there and not spending it too much, it can work just fine.

RBC High Interest eSavings Account

RBC’s eSavings account offers an interest rate of 0.5%. This is the same as TD’s ePremium account. Both accounts have no monthly fees but RBC has the big advantage of not requiring a minimum account balance. Transfers to other RBC accounts are free and you even get one ATM withdrawal per month, free of charge. If you sign up by August 31 2022 you can get a promotional interest rate of 3.0% for the first three months.

BMO High Interest Savings Accounts

BMO has a fairly simple account called the BMO smart saver account which has similar features to TD’s simpler account. It has the same interest rate of 0.05% and no monthly fees but it beats out TD as it does not present a minimum balance. There is a higher interest option available: The BMO savings builder account has an interesting mechanic. Although it offers a going interest rate of 0.1%, you can earn the bonus rate of 0.6% as long as you invest $200 into the account every month. There is no minimum account balance and as with most accounts mentioned in this article you have one free outgoing transfer per month, every other one costing you $5.

Scotiabank Momentum Plus Savings Account

The Scotiabank savings account is a special type of account. It is a tiered-interest account, which simply means that depending on how long you hold money in the account for you will earn more interest. The tiers start with a 0.35% interest rate. If you leave the money in the account untouched for 90 days then the rate jumps to 0.85%. For 180 days you get 0.9%, for 270 days you get 0.95%. If you wait a full 360 days, you get an even 1%. There is one important thing to note. This offer of increasing interest rates is up to one year and after that period you will only earn a base 0.85%. The account has no monthly fees but it also has no free transactions. Every single one will cost you $5. However, if you are signing up for this account you are likely looking to let the money build unspent so that you can accumulate interest rate during the one year period.

CIBC eAdvantage Savings Account

The CIBC savings account has an interest rate of 0.35% and no minimum balance. It also has a similar gimmick to BMO’s savings builder account. If you deposit $200 every month you get an additional 0.25% of interest. Once again there are no monthly fees. Like with Scotiabank every transaction you make will cost you $5 dollars.

Tangerine High Interest Savings Account

Tangerine’s savings account has a fairly competitive interest rate of 0.1%. This comes at the cost of no monthly fees too. Until October 13^th 2022 new clients can get a promotional interest rate of 3.25% for the first five months. As usual moving money to and from other Tangerine accounts is free of charge. All this makes the Tangerine savings account a good option. However, although they are an online bank, they do not offer interest rates that are as high as their other exclusively digital competitors.

Neo Money Account

Almost all the banks listed above are established big banks in Canada. They offer fairly similar and low interest rates on their Canadian high interest savings accounts. If you are looking for something with higher interest rates, digital finance is your answer. Companies like Neo offer comparatively astronomical interest rates on their savings accounts. The Neo money account has an interest rate of 1.8%. It also has no minimum balance and entirely free transactions. This account is flexible and has attributes of both a chequing and a savings account. If you are in Canada and looking for a no fee account with a great interest rate Neo might be worth your time.

The Verdict

There is no one account that is superior to all the others. Every single one has its own advantages and drawbacks. Tiered accounts like Scotiabank’s momentum plus are fantastic for the first year where interest rate grows and even after that, their rate of 0.85% is quite competitive. If the only thing you are looking for a high interest, then Neo could be your answer. There are other factors too of course, such as transaction costs. Most typical high interest savings accounts will allow for one free transaction per month, charging after that. Once again, Neo presents an advantage in this category, as they have completely free transactions. However, you may already be a client of another bank. This may make it more convenient to setup a high interest savings account with the same bank to allow for free transactions to and from your accounts.

Pros and Cons of Debit Cards

July 14, 2022 by Ben 3 Comments

Understanding more about debit cards can help you make better decisions to do with your finances. Debit cards have many upsides to them which make them useful in a wide variety of situations. Not everybody knows the right way to use them though. They are great for anybody and are accepted near everywhere making them convenient. However, according to worldwide data debit and credit cards are used at a near equivalent rate. This shows that credit cards must have some advantages over debit cards. In this article we will breakdown all the benefits and drawbacks of debit cards to help you be informed and decide when to use them.

The pros of a debit card

Debit cards are very convenient. Being declined very rarely, they are great worldwide and can be used to withdraw money from widely available ATMs without a service fee. Withdrawing cash with debit cards means that the money is immediately removed from your account. Because of this fact, you do not end up garnering a balance that you have to pay off. This balance comes with owning a credit card, and you could end up having to pay interest upon it, a problem that debit cards come without. Debit cards are interest-free.

Another advantage of debit cards over their credit counterparts is that in most cases they do not carry any annual fees. This factor is key for it makes them easier to afford. You won’t have to pay or use your debit card to keep it activated. You can make as few or as many purchases without worrying the card’s functionality. Accounts associated with debit cards like chequing accounts do sometimes charge monthly and/or annual fees.

With credit cards, it is quite easy to overspend in the short-term. This is not an issue with debit cards because the money you spend gets withdrawn instantaneously from your account. Your limit is capped at whatever you have stored in your account, though keeping track of your accounts status should be enough to make you weary of purchasing large items you might want. With credit cards you can keep buying and overspending without keeping tabs, which can have grave consequences when the time to pay the stack of bills comes around. Debit cards are also comparatively painless to acquire. Credit card application typically involves a hard credit check to understand more about your history and whether you are eligible. They also require a certain credit score but with debit cards all you need is a chequing or savings account to attach to the card and you’re all set to bank away.

The cons of a debit card

Though they have their upsides, debit cards come with a set of attributes that aren’t all that great. One of their biggest downsides is that in some circumstances they simply aren’t as safe as credit cards. Fraud protection with debit cards can be somewhat insignificant. The Federal Trade Commission dictates that if you notify your bank within two days of it being stolen, you are liable for up to $50 is charges that are fraudulent. If you miss that window of two days you can be held responsible for up to $500. In the worst case scenario where you only let your bank know after 60 days, you could end up paying all of the fraudulent charges. Banks simply cannot ensure total safety, especially with online retailers. Knowing this, it is suggested to use other payment methods when making purchases online. This can help you stay safer from cyber fraud which is rampant in today’s internet, even if you have antivirus software and a secure network.

Wherever and however you choose to spend your money, know that with debit cards your limit is equal to the funds in your chequing account. That means debit cards are better suited to more manageable purchases as opposed to expensive impulse items whose purchasing depends on whether you have the available funds in your chequing account. It is still an option to exceed your chequing account balance. If you do go over you will be charged overdraft fees. You can stop authorizing your bank to charge you these fees but you may end up having your debit card decline when going over your chequing funds.

Despite their similarities, one of the biggest differences between debit and credit cards is also one of the biggest disadvantages of debit cards. It is credit score and how debit cards have no effect on it. With a credit card you can build your credit score by making all your statement payments in full and on time. Debit cards cannot help you achieve this. Of course, credit cards also put you in danger because if you leave your card unpaid or pay late, you can accrue overwhelming debt and you will end up with bad credit. If you owe a lot on your credit cards with high interest, you can roll it over into your mortgage, by borrowing on your home equity line of credit. This will help you repay your credit card loans faster and in a less costly manner. Credit cards also often have strong rewards programs and perks that allow you to automatically accumulate points from use, or give you cashback. Debit cards don’t have programs like these. There are occasions where banks have their own specific rewards for debit cards but it is rarer.

Knowing all this information, you still might not be completely sure when and how to properly use a debit card. Essentially, debit cards are best to use for anything small and routine. This could be a fair list, including things like groceries or monthly entertainment service fees. This is because all the money is directly withdrawn from your chequing account, so you can monitor it easily, making sure you don’t run out. Overtime, this practice will lead to great established spending habits, making you more confident and comfortable with your money. Avoid the purchases carrying more hefty amounts as they are better suited to credit cards. The downsides are not too many, but you should be aware of them. Problems with fraud and the inability to improve credit score are two of the biggest issues.

Neo Financial MasterCard – Standard and Secured Credit Cards for Canadians

July 2, 2022 by Ben 7 Comments

The Neo Financial MasterCard is a secured credit card offered in Canada by Neo Financial. Founded in 2019, Neo is a Canadian company brought to you by the creators of SkipTheDishes. By being entirely digital, they allow you to comfortably control your finances from anywhere. Neo is partnered with and backed by MasterCard, ATB Financial and Concentra Bank who guarantee complete security as well as being recognized worldwide. Neo offer a good range of products with low costs and high rewards. For example the Neo Money Account offers unlimited free transactions with one of the highest interest rates in Canada at 1.8%. They also offer Neo Mortgage, Neo Invest, and the Neo Financial MasterCard.

The Neo MasterCard comes in a secured format and a regular unsecured version. Both variants are low cost and high reward.

Neo Financial MasterCard Review

The Neo Financial Mastercard is an intriguing option considering its many upsides and few and minor negatives. Neo’s Card is available across Canada and can be controlled and managed digitally from the Neo Financial App. The Neo Credit Card is meant for all Canadians. From those who want to save some money, to those who have a larger appetite for spending, anything is possible while building your credit score. To cater to these different audiences, the Neo Card has three different levels. The only distinguishing factor between the tiers is the average cashback rewards and their monthly fees. Moving through the tiers can be easily done through the app. It only costs the monthly fee of the given tier you are switching to, allowing flexibility to find the best level for you.

The Neo Standard Card is the base tier at $0 in monthly or annual fees with an average of 4% unlimited cashback at thousands of Neo partners.
Right above that you have the Neo Plus Card, averaging 5% cashback at partners with a monthly fee of $2.99.
At the top is the Neo Ultra Card. This level is considerably more expensive at $8.99 per month, however it comes in at an average of 6% unlimited cashback.

There are general rewards that go for all tiers as well. The Neo Credit Card guarantees a minimum 1% cashback across all purchases made. This basically means that if your cashback happens to fall under the 1% margin, Neo themselves will step in and push you up to that line. Other rewards include the 15% cashback on your first purchases at participating Neo partners. Applying for the Neo MasterCard is very easy and can be done through the Neo Financial App. Approval is instant as long as your credit score is 600 or above.

A physical Neo Card will then be sent to your door within a week or two. However, the app is absolutely enough to do everything including purchases, with notifications that notify you about your account live. The Neo Financial Mastercard is backed by Mastercard’s zero liability protection. In essence, you are completely safe from unauthorized payments at all times. Neo’s Credit Card only comes with a few downsides being that it does not include insurance. The other more noticeable downside is the higher Purchase Credit Rate of 19.99%-24.99%. With many rewards and the option of no monthly or annual fees, the Neo Financial Credit Card is fantastic and fresh competition to the usual Big Bank Credit Cards.

Neo Financial Secured MasterCard Review

For anyone who is struggling with their credit score, is new to credit or is entirely new to Canada, Neo provides the Neo Secured Card. Neo’s secured card comes with no monthly or annual fees. This is just one of the reasons that it can work for anyone. With the secured card, the only fee you’ll encounter is a one-time security deposit of only $50. As the card is secured, no hard credit checks are performed so that your approval is guaranteed. As well as being assured, your approval is instant so that getting started is immediate and hassle free.

Just like with the Neo Credit Card, everything can be controlled from the Neo Financial App. From increasing credit limits by adding security funds to freezing cards, the Neo app can do it all. Unlike other secured cards, Neo has fantastic cashback opportunities. You can earn an average of 5% unlimited cashback with their secured card. If you ever decide to close your account, your security funds will be returned as long as the balance has been paid in full. The secured card has the same Purchase Credit Rate as its unsecured counterpart and is once again without insurance. As can be seen, Neo’s Secured Card comes with many upsides and caters to a wide audience. It is quite rewarding and doesn’t have many drawbacks.

Neo Financial MasterCard Partners

Neo is partnered with Mastercard, meaning that both the Neo Credit Card and the Neo Secured Card are valid anywhere Mastercard is accepted. As previously mentioned, they fall under Mastercard’s zero liability policy, keeping you safe from unauthorized payments. Neo is also partnered with Concentra Bank, which grants Neo clients absolute security along with Mastercard. Neo’s clients earn an average of 5% cashback at thousands of partners which is automatically redeemed. The range of partners is great too with Netflix, Amazon, Loblaws, Walmart, Sport chek and many more in Neo’s lineup.

A Neo Financial Card is worth it for many reasons. For starters, everything can be managed digitally and is designed for convenience. The Neo cards are low cost, presenting no monthly or annual fees. This doesn’t prevent them from rewarding their customers though, with great cashback rewards everywhere. Their products are innovative and should be considered by anyone as they challenge the often archaic tenets of major Canadian banks for your benefit. For a limited time only, new Neo customers who get approved for the Neo Credit Card receive a $25 voucher.

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What Is Responsible Investment

April 13, 2022 by Ben 3 Comments

Responsible investment is an approach or strategy that takes into account governance, social, and environmental factors. Responsible investors acknowledge the fact that assets and businesses underperform when ignoring ethical, corporate governance, or social issues.

Environmental, Social, and Governance Factors

Responsible investment is about opting to invest in businesses that drive change, such as addressing public health issues and growing inequality, mitigating climate change, or improving labor standards. Examples of environmental issues that affect investment decisions are deforestation, pollution, waste, resource depletion, and climate change. Some of the social issues that impact the decision-making process are working conditions, child labor, modern slavery, and human rights. Corporate governance factors that can play a role in the selection of investments are donations and political lobbying, board structure and diversity, executive pay, and corruption and bribery.

ESG Integration

ESG integration is basically the inclusion of governance, social, and environmental factors in investment analysis. Issues such as the human resource policies, R&D, and product strategy of a company are analyzed, based on what issues the asset manager or institutional investor prioritizes. The extent to which the analysis is reliable and thoroughgoing depends on the values, sources of information, experience, and background of the analyst.

What Is Socially Responsible Investing?

Socially responsible investing refers to a diverse set of approaches that utilize environmental and social criteria when evaluating companies. Social criteria can cover a wide range of issues such as respect to gender and race, promotion and hiring practices, occupational safety and health, community welfare, etc. Environmental criteria can be things like:

Waste and recycling
Impact on natural resources
Raw material sourcing
Resource and energy efficiency
GHG emissions
Environmental management

Typically, investors score and select companies based on a set of chosen criteria. They first compile a list of qualifying companies and then evaluate their financial performance.

Thematic investment is a subtype of socially responsible investing whereby funds select companies that fall under a specific theme, such as climate change, pollution control, low carbon energy, or water distribution. A healthcare fund, for example, would invest in high-tech companies, nursing homes, health insurance providers, hospitals, and pharmaceutical companies.

Green investment falls under thematic investing and covers a variety of approaches that seek to support eco-friendly or green assets. These can include waste management, recycling, pollution control, and energy efficiency technologies, smart grids, low carbon vehicles, etc.

Impact Investing

Impact investing is a strategy that seeks to achieve a specific objective while generating financial returns. Such an objective can be supporting companies that hire persons with disabilities, companies promoting access to basic services such as education, healthcare, and housing, or projects providing employment to community members. Basically, the goal is to generate both positive environmental and social impact and financial returns.

Impact investors range from development finance institutions and family and institutional foundations to wealth managers, financial advisors, pension funds, and banks. The impact investment market has attracted a wide variety of institutional and individual players, including:

Nonprofits
Family offices
Insurance companies
Private foundations
Religious institutions
Diversified financial institutions
Fund managers

Socially Responsible Mutual Funds

These funds target and invest in companies that meet environmental, religious, moral, and social standards. They choose the securities that make up their investment portfolio based on both financial and ESG criteria such as policies aimed at fostering social inclusion, reducing poverty, or curbing the carbon footprint. Like other funds, they also seek to invest in companies with robust corporate government policies and strong balance sheets. The three main approaches that socially responsible funds utilize are impact investing, ESG integration, and value-based investing.

Typically, they target companies that employ and train disadvantaged minorities, promote responsible forestry, water and clean air conservation, or fight climate change. When looking into different mutual funds, investors typically account for factors such as experience, performance potential, risks, costs, and the extent to which the investment portfolios align with their values. There is a wide selection of socially responsible funds for investors to screen, a few examples being the SDRP S&P 500 Fossil Fuel Reserve, Vanguard FTSE Social Index Fund, and Parnassus Core Equity Investor. Parnassus, for example, excludes companies within the nuclear energy and fossil fuel sectors while the S&P 500 Fossil Fuel Reserve only targets fossil fuel-free companies. Vanguard eschews investments in companies within the gambling, alcohol, and tobacco sectors, civilian firearms manufacturers, and companies within the nuclear power and fossil fuel industries.

Socially Responsible ETFs

Socially responsible ETFs include a range of assets, including sector, international, and domestic equities. ETFs mainly invest in companies based on factors such as environmental and social impact. The iShares GNMA Bond ETF, for example, provides investors with the opportunity to promote affordable housing. The iShares MSCI ACWI Low Carbon Target ETF offers investors the chance to reduce their carbon footprint by investing in companies across a broad range of sectors, including real estate, energy, communication, and industrials, which are less dependent on fossil fuels. There are also ETFs with a focus on gender equity such as the SPDR SSGA Gender Diversity Index ETF, which invests in companies that help promote gender diversity. Another example is the iShares MSCI KLD 400 Social ETF which excludes companies that are involved in adult entertainment, military weapons, gambling, tobacco, and alcohol.

Socially Responsible Investing vs. Responsible Investing

While both terms are used interchangeably, there are some notable differences. Responsible investing refers to a broad range of strategies that consider both environmental and social factors and financial returns. The three main approaches here are impact investing, ESG integration, and socially responsible investing. With SRI, issuers or companies are excluded /negative screening/ or included /positive screening/ as investments based on environmental or social impacts. Positive screening might favor companies engaged in clean technology and alternative energy, environmental sustainability, or social justice. Negative screening, on the other hand, may mean eschewing investments in companies that have unacceptably high carbon footprints or a poor waste management record. Other negative screens may include labor violations, production of defense tools and weapons, gambling, tobacco and alcohol, and lack of diversity on boards. Exclusionary or negative screening is used to exclude companies within industries such as gas and oil and those that are contrary to international conventions and declarations. Common exclusions can also be:

Gross human rights violations
Nuclear power
Companies operating in a particular region or country
Hospitals or clinics practicing abortions
Companies operating in violation to international agreements such as the Rio Declaration on Environment and Development or the Universal Declaration of Human Rights.

Inflation in Canada

January 11, 2022 by Ben 6 Comments

Inflation rates are record high around the world, and Canada is no exception, with an 18-year high of 4.7 percent in November. Prices rose across sectors, ranging from bakery, dairy, and meat to furniture, household products, energy, and transportation. A combination of factors is driving inflation, the main being money printing, high oil prices, product shortages, supply chain disruptions, and pent-up consumer demand.

Reasons for Record High Inflation

Whether high inflation rates are driven by global supply chain issues or money printing is a hotly debated issue at the moment. In the view of some academics and finance experts at the Bank of Canada, it is supply chain disruptions that cause inflationary pressures and drive food and energy prices up. According to a second group of academics, monetary printing creates an overabundance of demand while supply would not always catch up. The result is inflation whereby prices rise and purchasing power declines.

If we take the monetarists’ argument, inflation is not a temporary phenomenon and requires a tight fiscal policy and interest rate hikes. Such policies would involve tax increases, spending cuts, unemployment, and recession. Recession is generally a period of economic decline marked by substantially lower levels of industrial and economic activity. Businesses see less demand and are forced to lay off workers to cut costs, generating unemployment and insecurity.

As prices rise, inflation also eats away at our money and savings. Inflationary pressures not only result in an overall decline of purchasing power but affect the performance of companies and interest rates on savings accounts. When inflation is high, central banks would typically raise interest rates to discourage consumers from borrowing and buying and keep the cost of goods and services stable. The Bank of Canada recently signaled that interest rate hikes cannot be ruled out as a way to keep inflation under control. The current situation, however, is high inflation and low interest rates on savings whereby the value of your money declines. Fortunately, there are plenty of things to do to protect your savings, like investing in real estate, precious metals, commodities, crypto, and defensive stocks.

Investing in Real Estate

As the value of real estate rises with inflation, rental income can be a potential hedge, especially when it comes to short-term leases such as multi-family properties. Investors who are able to keep their mortgage terms the same and adjust their rent up benefit from inflation. Investing in real estate also provides recurring income that either exceeds or keeps pace with inflation.

Precious Metals

Precious metals such as platinum, silver, and gold are known to be a hedge against inflation as well as a portfolio diversifier. Each precious metal, whether palladium or gold, has its own unique specifics, benefits, and risks. Gold, for example, is less affected by demand and supply, making it easy to sell and buy. An added advantage is the fact that there are different investment options to choose from, including numismatic coins, bars, and proof and bullion gold coins. The downside is that it doesn’t produce passive income the way real estate does.

Commodities

When inflation is high, commodity prices also rise and offer a good return potential. Unlike financial assets such as bonds and stocks, commodities are one of the few investment classes that actually benefit from inflationary pressures. The rationale is that rising demand for services and products results in price increases and hence, the value of the commodities that go into producing goods and services also increases.

Bonds and stocks, on the other hand, tend to perform better when the inflation rate is either slowing or stable. When inflation picks up, it reduces the interest rate that bonds pay while high-dividend and income-oriented stock prices fall. This is why returns from commodity indexes like the S&P Goldman Sachs Commodity Index, Credit Suisse Commodities Benchmark, and Bloomberg Commodity Index are independent of bond and stock returns.

Defensive Stocks

Defensive stocks offer stable earnings and dividends regardless of market conditions and typically outperform other investments in periods of economic decline such as recession or stock market crash. The reason is that they belong to sectors of the economy where there are only minor changes in demand. Such sectors are, for example, healthcare, utilities, and food and beverages. The consumer defensive sector includes businesses engaged in the production of packaging, personal and household products, food and beverages, and tobacco. The sector also includes companies offering services such as training and education. Organizations providing healthcare services fall in this category, including medical supplies and equipment, long-term care facilities, hospitals, home health care, research services, and pharmaceuticals. Examples are also life science development and biotech, vaccine developers, and medical device manufacturers. A third sector is utilities, comprising independent power producers and water, gas, and electric utilities and a fourth – communication services such as media and advertising, 5G network, and telephone and broadband.

Crypto Currencies

Investing in crypto currencies can be a viable alternative to stocks and bonds, with a return of over 6 percent. Proponents point to the fact that bitcoin is not tied to a particular economy, fiscal policy or currency and cannot be devalued by a central bank or government printing money. Not only is bitcoin a digital currency but it has a limited supply and is secure, interchangeable, and durable. Finance experts, however, warn that crypto is a highly volatile asset and one tied to speculative trading. Also, cryptocurrencies have been around for a relatively short period to establish whether they can really act as a hedge against inflation.

Gold, on the other hand, has held its value for centuries. Academics at Duke University also note that bitcoin is vulnerable to crashes and manias over relatively short periods, which makes it a risky asset. Its value is tied to two factors – speculative trading and supply. All in all, bitcoin may have a limited value in developed postindustrial countries with stable fiat currencies. Crypto currencies may have a more practical use in countries prone to political instability and turmoil and hyperinflation.

Summing Up

Inflation is currently higher than normal in Canada, primary drivers being money printing, pent-up demand, and supply chain bottlenecks. Droughts affecting agricultural produce across the country are only making things worse.

Global supply chain disruptions are likely to continue in 2022, mainly due to China’s Covid-19 zero policy, resulting in delayed ships and overwhelmed ports. Inflation rates of 4 – 5 percent could also be with us until 2024. While these changes are temporary, a shift in Canada’s monetary policy may not have the desired effect. Hiking interest rates would result in economic slowdown at a time when governments around the world are withdrawing emergency support and fiscal stimulus.

What Canadians can do to protect their savings is invest in precious metals, real estate, defensive stocks, or commodities, all of which acting as a hedge against inflation. Other assets that offer protection against inflation are leveraged loans, real estate investment trusts, and mortgage-backed securities and corporate bonds.