Looking for five per cent interest rate

Zoomer | January 1st, 2006

I would like to know where I can get a 5 per cent+ interest rate on my money. Investment in Canada only. – N.S.

Gordon’s answer: You won’t get that rate in a GIC. A late July survey published by The Globe and Mail showed that the highest five-year rate in Canada was 4.5 per cent. The average five-year rate was 3.73 per cent.

There are some mortgage-type investments that will pay a lot more than 5 per cent, but you may not want to take on the risk involved.

Your best bet may be the corporate bond market. There are some highly-rated corporate bonds with reasonable maturity dates that would meet your requirements. For example, in the June issue of my Income Investor newsletter we recommended an A rated debenture issued by Investors Group. It matures in May 2011 and has a yield to maturity of about 5.3 per cent, depending on the price your broker charges. There are similar corporate issues of comparable maturities that yield about the same.