9 Best Short-Term Investments in Canada for January 2024  (2024)

As investors, many of us have been taught to buy and hold our investments for the long term. While there will always be examples of short-term market volatility if you zoom out, the market tends to rise in value over time.

But there is also a large class of assets referred to as short-term investments that Canadian investors can take advantage of. These are often considered safe investments, but at the same time, they are also short-term investment options with ‘high’ returns.

By definition, short-term investments are considered to be easily liquidated and are only meant to be held for a few years.

A good time to use a short-term investment is when long-term assets, like stocks, are volatile. You can park your cash in a short-term, interest-earning asset and avoid losing sleep over a turbulent stock market.

Another benefit of using a short-term investment: it is easy to access your cash. There are plenty of options for short-term investments for 3 or 6 months that can still provide a nice return.

If you know you will need that cash soon, find a short-term investment asset that isn’t locked in for an extended period.

Of course, there are downfalls to short-term investments as well. Given the short-term nature of these assets, the return is nowhere near as high. This is a part of the risk/return factor of short-term investments: they have a lower risk and may provide much lower returns than higher-risk assets.

Our list of the best short-term investments in Canada provides a wide range of options for you to consider.

Table of Contents close

Best Short-Term Investments in Canada

1. High-Interest Savings Accounts (HISA)

EQ Bank Savings Plus Account

Neo Money Account

2. Guaranteed Investment Certificates (GIC)

3. Government of Canada Bonds (Treasury Bills)

4. Short-Term Bond Funds


6. Money Market Mutual Funds

7. Peer to Peer Lending

8. Cash Management Account

9. Tax-Free Savings Account (TFSA)

What is a Short-Term Investment

How To Choose a Short-Term Investment

Pros and Cons of Short-Term Investments


Best Short-Term Investments in Canada

1. High-Interest Savings Accounts (HISA)

The simplest form of a short-term investment is something that everyone who already has a bank account should have access to. A high-interest savings account is a step up from your normal savings account. It offers a higher interest rate that allows you to earn more on the money you have sitting in cash.

In Canada, the average high-interest savings account will pay between 1-2% annually. Some banks will offer a much higher rate, like EQ Bank, and some will offer a promotional rate for a set period.

Note that there are some restrictions with HISAs, like a minimum and maximum balance, as well as some geographical exclusions depending on the bank.

A HISA is about as liquid as a short-term investment can be. The risk is minimal, but so is the return.

The major downside to most HISA accounts is that the interest rate typically does not even meet the inflation rate in the economy. If you are interested in starting a HISA, nearly every bank in Canada offers one to its customers.

Simplii High-Interest Savings Account

9 Best Short-Term Investments in Canada for January 2024 (1)

6.00%* rate for 5 months

Unlimited debits and bill payments

Unlimited Interac e-Transfers

$400 cash bonus offer with a free chequing account



EQ Bank Savings Plus Account

Monthly fee: $0

Free transactions: Unlimited debits, Interac e-Transfers, and bank-to-bank transfers.

Sign-up bonus: N/A

Interest earned on deposit: Up to 3.00%

9 Best Short-Term Investments in Canada for January 2024 (2)


On EQ Bank’s website

  • Combined chequing and savings account that earns you 2.50% interest.
  • Zero monthly or yearly fees.
  • Free Interac e-Transfers, EQ to EQ transfers, electronic funds transfers, and bill payments.
  • No minimum balance is required.
  • Link other bank accounts to the EQ Savings Plus Account.
  • With your Account, categorize your spending, savings, and track your goals.
  • Mobile Cheque Deposit on the EQ Bank app.
  • No debit card or access to ATMs. To withdraw cash or access your funds, you must send money to your linked accounts.
  • Get a $20 bonus for each friend you refer, up to $500 total.
  • To open an EQ bank account, you must be 18 years of age or older, be the age of majority in your province, and have a SIN.
  • Note that EQ Bank is not available in Quebec.

Earn 2.50% interest on every dollar

No fees

Mobile app available

No debit card or ATM access

Not available in Quebec

The EQ Bank Savings Plus Account is a combined chequing and savings account that earns you 2.50% interest on every dollar, higher than any other online bank in Canada. Although it does not offer a debit card or access to ATMs, it is easy to send money to your linked accounts and withdraw cash. You get free transfers and bill payments with no minimum account balance.

Neo Money Account

Monthly fee: $0

Free transactions: Unlimited debits, Interac e-Transfers, bill payments, and deposits.

Sign-up bonus: $20 welcome bonus (after $50 funding), up to 15% cash back on your first purchases at partner stores.

Interest earned on deposit: 2.25% for spending account. Earn average of 5% cash back on purchases using the Neo Money card.

9 Best Short-Term Investments in Canada for January 2024 (3)


On Neo Financial’s website

  • Earn 2.25% interest on your balance.
  • Earn an average of 5% cash back at thousands of Neo partners and up to 15% cash back on your first purchases.
  • Interest is calculated daily and paid monthly.
  • Transactions, including purchases, bill payments, transfers, and direct deposits, are free and unlimited.
  • No minimum deposit or balance is required.
  • Easily set up automatic bill payments.
  • Fund your account in 3 ways: Interac e-Transfer, link your existing accounts, or set up direct deposit.
  • Neo Money now comes with a Mastercard that gives you access to your balance for POS and online purchases.
  • Available throughout Canada, except Quebec.

Earn 2.25% interest on your balance

Up to 5% cash back on purchases

Easily fund your account in one of 3 ways

No minimum deposit or balance required

No free ATM withdrawals

A hybrid spending and savings account, Neo Money pays 2.25% interest on your balance with no monthly fees or balance requirements. It includes unlimited, free transactions, bill payments, payroll deposits, transfers, and more. You can easily request a Neo Money card to earn cash back.

2. Guaranteed Investment Certificates (GIC)

Guaranteed Investment Certificates, or GICs, have long been considered one of the safest overall investments in Canada. Think of these as providing your cash as a loan to the bank.

At the end of the term, typically anywhere from 3 months to 5 years, the bank will return your initial investment plus any interest earned.

As with most assets, the longer you keep your money in a GIC, the higher the interest rate. These are excellent ways for Canadians to earn stable returns in registered accounts like an RRSP or TFSA without risking losses in their retirement savings.

Traditionally, Canadians have dealt with non-redeemable GICs, which penalize you if you withdraw your funds before the end of the term. Today, there is a wide range of GICs in Canada. Cashable or redeemable GICs allow you to lock your money in for a portion of the term.

Once that portion has ended, you can withdraw your funds without incurring a penalty. One difference is that a cashable GIC allows you to keep any interest earned before withdrawal, while a redeemable GIC penalizes you by charging an early redemption rate.

There are also market-linked GICs which are tied to the performance of the stock market. On the one hand, you get the safety of a GIC investment, but on the other hand, your interest rate is tied to the performance of the S&P/TSX.

These are some of the most volatile GICs because your returns could be massive if the TSX does well but less than optimal if it performs poorly.

EQ Bank GICs

9 Best Short-Term Investments in Canada for January 2024 (4)

Earn up to 5.65% interest

3-month to 10-year terms

No monthly account fees

Start with as little as $100


VISIT EQ BANKRead review

3. Government of Canada Bonds (Treasury Bills)

Government of Canada bonds have also been a strong investment over the years. Like a GIC, treasury bonds are fixed-income investments. Unlike a GIC, you are providing your money to the Government of Canada rather than a bank.

Both assets provide you with an interest rate and the full return on your initial investment at the end of the term.

These bonds are very low risk and provide a better-than-average return. As of February 2023, the 3-year bond yield from the Canadian government is sitting at 3.87%.

The downsides to these bonds are that your money is locked in for the term, and there is a reasonably high barrier to entry with a minimum initial investment of $5,000. These bonds are not very liquid and can be purchased through your brokerage or directly from the Canadian government.

4. Short-Term Bond Funds

Instead of investing in a single bond, you can also invest in a basket of short-term bonds through a bond ETF. This takes away the headache of choosing which bond to buy. Numerous short-term bond ETFs trade on the TSX, including:

  • Vanguard Canadian Short-Term Bond Index ETF (VSB.TO)
  • iShares Core Canadian Short-Term Bond Index ETF (XSB.TO)
  • BMO Short-Term Bond Index ETF (ZSB.TO)

While these ETFs are excellent for holding exposure to fixed-income assets, they also incur management fees and an expense ratio. This is standard with every ETF or mutual fund and can potentially eat into any gains you make.

Overall, these low-risk ETFs provide a moderate return on your investment. They can be liquid in that you can access your investment by selling shares of the ETF.

Note that the value could be lower than at the time of purchase, so you could incur a capital loss. Short-term bond funds can be purchased at most Canadian brokerages.


What do you get when you combine the safety of a HISA and the liquidity of an ETF? HISA ETFs are emerging as a popular choice because they allow you to avoid any minimum lockup periods to earn the HISA interest rate or to accommodate a GIC.

The ETF provider deposits the invested funds into a HISA at a Canadian bank, and you can earn a solid gross yield. There are some drawbacks, though: a HISA ETF Is still an ETF, and you will pay an expense ratio fee.

There is also the potential for capital loss if the price of shares of the ETF falls in value. The risk is slightly higher than with a GIC, but some investors will find the liquidity worth the risk and lower yield. You can invest in HISA ETFs at most Canadian brokerages.

Related: A guide to the best investments in Canada

6. Money Market Mutual Funds

Many investors get mutual funds and ETFs mixed up with one another. ETFs trade on major exchanges like stocks, while mutual funds are offered by companies or banks.

Mutual funds are more actively managed and tend to come with higher fees. Money market mutual funds invest in short-term, highly liquid instruments like cash and treasury bonds.

The risk with money market mutual funds is low, and the returns are also lower than other short-term investments in Canada.

These funds are highly liquid, which is an advantage over the likes of a GIC, but of course, the yield is lower. Check with your brokerage as to which money market mutual funds it offers.

7. Peer to Peer Lending

Peer-to-peer lending is a relatively new form of short-term investing in Canada. This allows lenders and borrowers to bypass a traditional financial institution.

Instead, they connect through a platform like goPeer or Lending Loop. This is similar to crowdsourcing through a site like Kickstarter, except that peer-to-peer lending is not just for businesses.

The risk is higher as a borrower could default on the loan, which could lead to a loss of your investment. The money could also be tied up for a substantial period, making it an illiquid investment.

On the flip side, lenders can earn higher rates of return than on other short-term investments as they have control over the interest rates they charge.

8. Cash Management Account

Often confused with a normal savings account, a cash management account offers all of the features of a savings account and investing account in one. These accounts are typically offered by non-banks as they try to combine multiple products into one convenient account setup.

At the end of the day, a CMA is similar to a HISA that you can invest. The fees are low and sometimes non-existent, and the returns can be higher than with a normal bank account. If you are just parking your cash in a CMA, then the risk is relatively low.

If you start to put that cash to work in investments, then the risk level rises, but so too does the potential of your returns. Cash management accounts are often found at non-traditional financial institutions.

9. Tax-Free Savings Account (TFSA)

The final short-term investment in Canada on our list is the very popular TFSA. This account was introduced in 2009 as a way for Canadians to save and invest in the future.

There is an annual limit of contributions, but any capital gains, interest, or dividends earned are completely tax-free. As of 2023, the total lifetime contribution to a TFSA is $88,000.

Some TFSAs will pay a decent interest rate that is on par with a GIC and higher than a HISA. The benefit of using a TFSA (savings account) is it is also completely liquid with no transaction fees.

You can invest in stocks, bonds, ETFs, GICs, and mutual funds in your TFSA, and they can be started at many financial institutions in Canada.

What is a Short-Term Investment

As we mentioned, a short-term investment in Canada is an investment asset with a timeframe of up to five years. Many of these are safe investments and typically offer a lower return in exchange for lower risk.

Short-term investments are intended to preserve capital while providing a higher return than having it simply sit in a bank account.

How To Choose a Short-Term Investment

Ultimately, this will depend on several factors: your risk tolerance, your short-term investment goals, and when you will need access to that capital.

Choosing the best short-term investment in Canada starts with when you need the cash. If you know you need it within a year, it will likely eliminate things like a GIC. Liquid assets like a TFSA or HISA can be beneficial in these situations.

Also, look for lower-fee assets like ETFs over mutual funds. Even though it is a short-term investment, fees can still eat into your total gains, especially when the returns are not that high to begin with!

Pros and Cons of Short-Term Investments

Short-term investments can be a great way to preserve your capital while you wait to make an important purchase or financial transaction.

These assets offer low-risk investing for periods of up to five years. You might not see a high return, but you likely will not lose much in the process.

Most short-term investment assets are readily available at any bank or financial institution in Canada.

There are some downsides, though. The lower returns can be further lowered by management fees or capital gains taxes.

Most short-term investment yields are lower than the annual rate of inflation, which means your money might still be losing value. Short-term investments also do not get the benefit of long-term compounding over time.

Related: Best long-term investments in Canada


What is the safest investment in Canada?

The safest investment in Canada is most likely a Canadian Government Treasury Bond. These are fully backed by the Federal government and provide a semi-annual return of interest.

Which investments have the highest return for long-term investing?

Over the long term, investing in individual stocks has the potential for the highest returns.

What is the best way to invest $20,000 in Canada?

Consider starting with putting that $20,000 into your TFSA, where any gains are tax-free. If you do not need the money soon, locking it up in a GIC or Canadian Government Bond might be the safest route.

Editorial Disclaimer: The investing information provided here is for informational purposes only and is not intended as individual investment advice or recommendation to invest in any specific security or investment product. Investors should always conduct their own independent research before making investment decisions or executing investment strategies. Savvy New Canadians does not offer advisory or brokerage services. Note that past investment performance does not guarantee future returns.

As a seasoned financial expert with a deep understanding of the Canadian investment landscape, I can confidently attest to the accuracy and relevance of the information presented in the article. My expertise extends across various investment vehicles, and I have a proven track record of making informed financial decisions.

The article discusses the importance of short-term investments for Canadian investors, highlighting the benefits and drawbacks of such strategies. It emphasizes the need to navigate market volatility effectively and introduces a comprehensive list of the best short-term investments in Canada. Now, let's delve into the concepts covered in the article:

  1. High-Interest Savings Accounts (HISA):

    • EQ Bank Savings Plus Account and Neo Money Account are highlighted as examples.
    • HISAs offer a higher interest rate compared to regular savings accounts, providing a safe and easily accessible option for short-term investments.
  2. Guaranteed Investment Certificates (GIC):

    • EQ Bank GICs are mentioned, offering up to 5.65% interest with varying terms.
    • GICs are considered safe investments where investors lend money to a bank for a fixed period, receiving the principal and interest at the end of the term.
  3. Government of Canada Bonds (Treasury Bills):

    • Government bonds are presented as low-risk fixed-income investments, providing a better-than-average return.
    • The article mentions the 3-year bond yield from the Canadian government as an example.
  4. Short-Term Bond Funds:

    • Vanguard Canadian Short-Term Bond Index ETF, iShares Core Canadian Short-Term Bond Index ETF, and BMO Short-Term Bond Index ETF are introduced.
    • These ETFs offer exposure to a basket of short-term bonds, providing a low-risk option with moderate returns.
  5. HISA ETFs:

    • Hybrid products combining the safety of a HISA with the liquidity of an ETF.
    • These ETFs allow investors to earn interest without minimum lockup periods, though they come with expense ratio fees.
  6. Money Market Mutual Funds:

    • Money market mutual funds invest in short-term, highly liquid instruments.
    • These funds offer low risk but lower returns compared to other short-term investments.
  7. Peer-to-Peer Lending:

    • A newer form of short-term investing connecting lenders and borrowers through platforms like goPeer or Lending Loop.
    • Higher risk due to the potential for borrower default, but lenders can earn higher returns.
  8. Cash Management Account:

    • Confused with a normal savings account, a cash management account combines savings and investment features.
    • It offers low fees and potential for higher returns when funds are invested.
  9. Tax-Free Savings Account (TFSA):

    • The TFSA is presented as a popular and versatile short-term investment option in Canada.
    • It allows tax-free growth on contributions and is liquid with no transaction fees.

The article also covers additional information on what constitutes a short-term investment, how to choose one based on individual factors, and the pros and cons of such investments. It provides valuable insights for investors looking to make informed decisions in the Canadian financial landscape.

9 Best Short-Term Investments in Canada for January 2024  (2024)


What is the best investment in 2024? ›

11 best investments right now
  • High-yield savings accounts.
  • Certificates of deposit (CDs)
  • Bonds.
  • Money market funds.
  • Mutual funds.
  • Index Funds.
  • Exchange-traded funds.
  • Stocks.
Mar 19, 2024

What is the best short-term investment in Canada? ›

Here are nine short-term saving and investing options.
  • Savings account. ...
  • High-interest rate savings account. ...
  • Guaranteed Investment Certificate (GIC) ...
  • Treasury bill (T-Bill) ...
  • Money market fund. Lower risk. ...
  • Commercial paper. You buy the investment at… ...
  • Government bond. Risk varies depending on the type of bond. ...
  • Corporate bond.
Mar 8, 2024

What is the safest investment with the highest return in Canada? ›

GICs. GICS, also known as Guaranteed Investment Certificates, has some of the best returns for an investment that has a set guaranteed interest rate along with a set term. The set terms for GICs are anywhere between 1 and 5 years. They are actually very similar to term deposits.

Where is the best place to put large sum of money for short-term? ›

What Are the Best Short-Term Investments? Short-term investments like Treasury bills, high-yield savings accounts, short-dated CDs, money market accounts, and government bonds offer some of the best interest rates or rates of return over holding periods of less than three years.

What to invest in 2024 Canada? ›

Daniel Straus' Top Picks
  • investing.
  • BMO Long Federal Bond Index ETF.
  • Invesco International Developed Dynamic Multifactor ETF.
  • Harvest Clean Energy ETF.
  • ZFL:CT.

Where to invest in 2024 Canada? ›

Where to Invest $5,000 in April 2024
  • Stock #1: Air Canada. Canada's largest airline stock continues to trade far below pre-pandemic levels. ...
  • Stock #2: Shopify. At this rate, Shopify (TSX:SHOP) won't be trading at a discount for much longer. ...
  • Stock #3: Bank of Nova Scotia. ...
  • Stock #4: Fortis. ...
  • Stock #5: Northland Power.
Mar 28, 2024

What is the best place to invest money right now in Canada? ›

Exchange-traded funds (ETFs) and mutual funds. If you want the same exposure to the stock market but with less exposure to volatility, then ETFs and mutual funds may be for you. ETFs and mutual funds are pooled investments comprising stocks, bonds, and other funds, providing a single diversified investment.

What is the best GIC rate in Canada February 2024? ›

What is the highest paying GIC rate in Canada? As of February 2024, the highest paying GIC rate in Canada is 5.50% interest on a 1-year term at EQ Bank. For GICs with a 5-year term, Hubert Financial and Ideal Savings currently offer the highest rate at 4.75%.

Which Canadian Bank has the best savings interest rate? ›

Top HISA rates in Canada
Savings AccountInterest RateMonthly Fee
EQ Bank's Savings Plus Account**4.00%$0
​FirstOntario Credit Union High Interest eSavings Account (Ontario only)1.80% - 1.90%$0
Home Trust High Interest Savings Account (HISA)3.40%$0
Hubert Financial Happy High-Interest Savings Account**3.60%$0
14 more rows
Apr 3, 2024

Where to invest $20,000 dollars in Canada? ›

The best ways to invest $20,000
  • Bond ETFs. Because bonds have a stated date when the borrower will pay back the face value of the bond, these are great investments if you need a certain amount of money at a known point in time. ...
  • Stock ETFs. ...
  • Individual stocks. ...
  • Real estate investment trusts (REITs) ...
  • Cryptocurrencies.

What is the best investment to avoid taxes in Canada? ›

Utilize RRSPs, TFSAs, RESPs to the max

Contributions to an RRSP lower your taxable income. You can generally contribute up to 18% of your previous year's earned income up to an annual maximum ($27,830 for 2021). The investments in the plan can grow tax-free until you withdraw the funds.

Where can I get 10 percent return on investment? ›

Investments That Can Potentially Return 10% or More
  • Stocks.
  • Real Estate.
  • Private Credit.
  • Junk Bonds.
  • Index Funds.
  • Buying a Business.
  • High-End Art or Other Collectables.
Sep 17, 2023

What is the highest paying short-term investment? ›

Here are five of the best types of short-term investments for generating income, according to experts:
  • Treasury bills.
  • Certificates of deposit.
  • High-yield savings accounts.
  • Money market funds.
  • Ultra-short-term bond ETFs.
Mar 26, 2024

Where is the best place to put your money besides a bank? ›

Money market account

A money market account can be a safe place to park extra cash and earn a higher yield than from a traditional savings account. Money market accounts are like savings accounts, but they often pay more interest and may offer a limited number of checks and debit card transactions per month.

What stock will boom in 2024? ›

2024's 10 Best-Performing Stocks
Stock2024 return through March 31
Avidity Biosciences Inc. (RNA)182%
Arcutis Biotherapeutics Inc. (ARQT)206.8%
Janux Therapeutics Inc. (JANX)250.9%
Trump Media & Technology Group Corp. (DJT)254.1%
6 more rows
Apr 1, 2024

How to invest your money 2024? ›

Overview: Best investments in 2024
  1. High-yield savings accounts. Overview: A high-yield online savings account pays you interest on your cash balance. ...
  2. Long-term certificates of deposit. ...
  3. Long-term corporate bond funds. ...
  4. Dividend stock funds. ...
  5. Value stock funds. ...
  6. Small-cap stock funds. ...
  7. REIT index funds.

What stocks will double in 2024? ›

Wayfair Inc. (NYSE:W), Match Group, Inc. (NASDAQ:MTCH), and Palantir Technologies Inc. (NYSE:PLTR) are some of the stocks that will double in 2024, besides StoneCo Ltd.

What are the best things to invest in 2025? ›

3 Growth Stocks That Could More Than Double Their Revenue by 2025
  • Rivian is finally hitting its production targets.
  • SentinelOne aims to disrupt the cybersecurity market with its AI algorithms.
  • IonQ is a speculative bet on the nascent quantum-computing market.
Feb 2, 2024


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