# safe place for 100k?



## showmethemoney45 (Feb 27, 2015)

Hi, I will have 100k come available in the next month. I will be spending this next year so I'm looking to keep it somewhere safe till then that will earn me a little play money. I could put the almost the whole thing into TFSA for my husband and I so that is obviously what I will do. I have a questrade account currently. Should I just keep in a HISA or buy some fixed income ETFs?
Cheers


----------



## Feruk (Aug 15, 2012)

HISA = no risk
Fixed Income ETFs = some risk

Sounds like you need the money next year, so HISA is what I'd do.


----------



## gibor365 (Apr 1, 2011)

HISA ... the only fixed-income equity I'd consider is DFN.PR.A or similar


----------



## Tawcan (Aug 3, 2012)

Your best bet is probably do a ladder HISA. Anything in the market will have some risk.


----------



## MMcLaurent (May 1, 2015)

If you need the money and have plans for the full amount, don't risk it!


----------



## NorthKC (Apr 1, 2013)

HISA for guaranteed no risk especially for such a short term use!


----------



## namelessone (Sep 28, 2012)

Laddered government bond ETF pays 3.3%
Laddered corporate bond ETF pays 4%. 

Risk is low.


----------



## My Own Advisor (Sep 24, 2012)

HISA.


----------



## RBull (Jan 20, 2013)

HISA by a mile.


----------



## rikk (May 28, 2012)

showmethemoney45 said:


> Hi, I will have 100k come available in the next month. I will be spending this next year so I'm looking to keep it somewhere safe till then that will earn me a little play money. I could put the almost the whole thing into TFSA for my husband and I so that is obviously what I will do. I have a questrade account currently. Should I just keep in a HISA or buy some fixed income ETFs?
> Cheers


A bit late, but Peoples has a 1-yr TFSA GIC at 2.050 ... yeah I know, really low these days, but it's tax free ... so I'm guessing from your post you and husband are eligible to put $41K each into that, the $18K left I might invest, but first into a HISA ... is what I'd do.


----------



## showmethemoney45 (Feb 27, 2015)

So lets say hypothetically speaking if I had borrowed that money and invested it in an HISA is the interest on the borrowed $ tax deductable? If i "invest" the money it is deductable but is a HISA considered an investment?
I understand the interest used to borrow the money may be larger than the interest earned.


----------



## 0xCC (Jan 5, 2012)

The borrowed money is being used to earn taxable income so the interest paid on the borrowed funds should be deductible.


----------



## AltaRed (Jun 8, 2009)

0xCC said:


> The borrowed money is being used to earn taxable income so the interest paid on the borrowed funds should be deductible.


Only if there is a reasonable expectation of a profit. Read the associated CRA Bulletin on that. Borrowing and knowing the result would likely be negative would not pass the smell test. Writing off exess losses against other income would eventually be denied.


----------



## showmethemoney45 (Feb 27, 2015)

0xCC said:


> The borrowed money is being used to earn taxable income so the interest paid on the borrowed funds should be deductible.


So you can't write off interest if the borrowed money is put in TFSA?


----------



## showmethemoney45 (Feb 27, 2015)

AltaRed said:


> Only if there is a reasonable expectation of a profit.


Probably not then.


----------



## AltaRed (Jun 8, 2009)

showmethemoney45 said:


> So you can't write off interest if the borrowed money is put in TFSA?


AFAIK, you haven't been able to do that for funds contributed to an RRSP for a long time. Why would it be different for a TFSA? Just asking.


----------



## Eclectic12 (Oct 20, 2010)

I'm not sure there is a need to ask or that there should be any doubt. There are lots of articles that say this for the RRSP and TFSA.

Where one wants to get it from the horse's mouth, CRA says on their web site:


> *Line 221 - Carrying charges and interest expenses*
> 
> Claim the following carrying charges and interest you paid to earn income from investments:
> ... most interest you pay on money you borrow for investment purposes, but generally only if you use it to try to earn investment income, including interest and dividends ...


Line 221 is clearly where the investment interest is deducted from one's tax return.


Further down the web page regarding contributions to an RRSP or TFSA - it says:


> *You cannot claim on line 221 any of the following amounts:*
> the interest you paid on money you *borrowed to contribute to a registered retirement savings plan*, a pooled registered pension plan, a specified pension plan, a registered education savings plan, a registered disability savings plan,* or a tax-free savings account (TFSA)*;


It seems pretty cut and dried that RRSP and TFSA contributions are not eligible for interest deductions from borrowing.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/221/menu-eng.html


Cheers

*PS*

One can borrow all they want to for registered contributions ... it is the deduction of interest against one's income that is not allowed.


----------



## showmethemoney45 (Feb 27, 2015)

Thank-you! great info


----------



## Feruk (Aug 15, 2012)

namelessone said:


> Laddered government bond ETF pays 3.3%
> Laddered corporate bond ETF pays 4%.
> 
> Risk is low.


What sort of loss can one expect on a 1% raise in interest rates?


----------



## lonewolf (Jun 12, 2012)

Depends on duration a 3 month Tbill is going to be effected a lot less then a 100 year bond. Thinking that interest rates could only rise by 1% in a short time period would have been a mistake in the bankers panic.


----------



## larry81 (Nov 22, 2010)

http://www.theglobeandmail.com/glob...better-way-to-park-your-cash/article19058090/

http://canadiancouchpotato.com/2010/10/12/parking-cash-in-your-portfolio/


----------



## showmethemoney45 (Feb 27, 2015)

How bout Vanguard VSB?


----------



## My Own Advisor (Sep 24, 2012)

I thought you wanted safe?

Bonds have more risks than HISA cash.


----------



## showmethemoney45 (Feb 27, 2015)

hmmm. ok you guys win...HISA it is.

For arguments sake what would be the next safest bet?


----------



## Quotealex (Aug 1, 2010)

Next safest would be government bonds...


----------

