During the first three months of the year, the financial industry battles for your attention. Plenty of promotions pop up, as new TFSA room becomes available, RRSP season gets underway and many employees receive their bonuses.
Most messages come from marketing departments to grab your attention in 140 characters or less, to get you to act quickly. Cut through that noise; don’t rush your financial decisions.
Save your precious free time to focus on whether to make an RRSP contribution, lock in a fixed mortgage rate or check you’re not missing any deductions on your tax return – tangible things that will actually put more money in your pocket.
Lots of money moves around right now, so make sure the grass is actually greener on the other side. Here are four examples of current promotions, and one “hidden” promotion that could be to your advantage:
1. Earn 2.5% until March 31
Limited-time offers leave something to be desired. It’s like a theatre offering free popcorn and the fine print says only the first kernel is free.
Forget these teaser offers. They’re often not worth the trouble of opening a new savings account at a new institution, because 2.5% over the next 60 days is only about $42 on a $10,000 deposit.
If you really want to earn higher yields on savings accounts and GICs –- think the next 60 months, not the next 60 days – consider smaller institutions like trust companies and credit unions. They have to be more competitive to attract clients and are still protected by CDIC guarantees.
2. 100-free-trades offer, for 60 days
This offer occasionally comes with a cash reward, too. But 100 free trades? Really? If there’s one thing a do-it-yourself investor should be avoiding, it’s becoming a day trader.
According to Morningstar Direct, the average asset-weighted portfolio turnover for a non-index U.S. stock mutual fund in 2011 was 51%. If you’re trading more than the average professional, you’re probably setting yourself up to be less than average. Stick with a buy-and-rebalance ETF portfolio.
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