Types of investments

There are a number of investment vehicles. Investors have to choose the one best suited to their needs and personality.

Registered Retirement Savings Plan (RRSP)
Traditional Guaranteed Investment Certificates (GICs)
Market-linked guaranteed investments
Short-Term Deposits
1-Year Cashable GICs
20-Month Convertible Term Savings

Interest, dividends and capital gains accumulate from year to year to provide an adequate retirement fund.

Contributing to an RRSP is a win-win situation:

• It is a tax-sheltered investment.
• Amounts invested or contributed are not taxed until money is taken out of the RRSP.
• You may remove money from an RRSP without paying tax on it to finance advanced studies, for example, or to buy a home.

Every year, you can contribute up to 18% of your previous year's earnings to your RRSP. You may also add any unused contributions from previous years.

Many young people think it's still too early in the game to contribute to this type of investment. Their retirement seems so far away! But by getting a head start, they will be in a perfect position to save the optimal amount, which will ultimately make the sacrifice worthwhile.

The traditional Guaranteed Investment Certificates (GIC) may be purchased for terms between 12 months and 60 months. The minimum purchase is $500 or, you may purchase a 5-year GIC for as little as $100, with compounded interest only. Interest rates are competitive and provide the additional flexibility of various interest payment options. These options include annual, semi-annual, monthly (minimum $5,000 for this option), and compounded rates to maturity. Interest payments can be deposited into an account at any financial institution.

This type of investment is similar to term savings, except that its return based on the performance of stock markets or actively managed stock portfolios rather than being set in advance. The return is usually higher than term savings, but depends, of course, on stock market performance.

In the case of Stock Market-Indexed Guaranteed Investment, the return is determined by the Canadian or international market index, depending on the index chosen. In the case of Alternative Guaranteed Investment, Perspectives Plus Guaranteed Investment and Tactical Rate Management Guaranteed Investment, their return is determined by the performance of a number of securities.

Find out more about market-linked guaranteed investments.

Short Term Deposits can be purchased with a minimum investment of $1,000 for any term between 30 and 364 days. These deposits have competitive interest rates and provide flexible renewal options. You can automatically:

• Rollover principal and interest
• Rollover principal and receive your pay interest
• Redeem principal and interest at maturity

Principal and interest amounts can be paid by cheque or direct deposit to an account of your choice. In addition, your investment can be redeemed at any time. An early redemption rate will be applied to redemptions prior maturity.

Cashable GICs may be purchased for any amount starting at $1,000. The Cashable GIC is a one-year term. You have the flexibility of redeeming your GIC at any time, and with no interest penalty after 90 days. Interest on this Cashable GIC is paid annually.

Our 20-Month Convertible Term Savings account may be purchased for any amount starting at $1,000. This non-redeemable deposit is convertible at any time (in total or in part) for any fixed term non-convertible Desjardins savings product (including mutual funds and excluding demand accounts), without penalty. This innovative product provides a higher return than redeemable savings products and gives members the opportunity to benefit from future rising interest rates.