Best Short-Term Investments Canada | Grow Cash Safely

Short-term investments are intended to preserve capital while providing returns in a short timeframe. They’re  especially beneficial for those who need to access their money within a few months to a couple of years. 

Small-term investments are lower risk because they’re in relatively safe assets (such as bonds or GICs), but they also come with lower returns. These investments differ from long-term strategies because they offer quick access to funds, which makes them suitable for immediate financial goals. 

A HISA is a low-risk, flexible option if you’re looking for an account with slightly higher returns than a regular savings account. Some financial institutions may require a minimum deposit. If you choose an online bank, it may take one to two business days to transfer your funds to a financial institution to withdraw your funds. 

For example, Neo Financial will give you 3% for any money you put in the account. 

GICs provide guaranteed returns and are low-risk investments. You can choose from different term lengths, such as six months, three years or even up to 10 years. Typically, the longer the term, the higher the interest rate you’ll earn. 

Usually, you can start investing your money with as little as $500. However, you’ll need to lock funds for that period of time to receive the payout. If you need to take your money out early, you may have to pay a penalty.

Money market funds are a type of mutual fund that invests in low-risk securities such as treasury bills, cash funds and bonds. They have a term of less than a year. Since they are lower risk than the average mutual fund, it’s ideal for investors who want quick accessibility, as well as the ability to earn fixed interest while protecting their wealth. 

To start investing, you typically need to start with at least $500. Also, there may be portfolio management fees associated with the money market funds. If you need to withdraw the money, they are highly liquid and only need a few days' notice to take it out. The good news is that there usually isn’t a penalty or fee to take your money out. 

There are three main types of bonds: 

1. 1 Short-term government bonds include treasury bills (T-bills) or provincial bonds that mature within a year or two, which are low-risk options.
2. 2 Corporate bonds are considered investment-grade corporate bonds with a short maturity date. However, be cautious about these types of bonds as they carry more risk than government bonds.
3. 3 Bond exchange-traded funds (ETFs) are a type of investment that holds a portfolio of bonds and trades on the stock exchange. It focuses on short-term bonds and can provide diversification and liquidity. 

These investments can be purchased through a brokerage with options between provincial, federal or investment-grade corporate bonds.

This unique savings account offered by EQ Bank provides higher interest rates as it’s locked in with short notice windows. When you start depositing money, it will start earning interest daily. 

When you need to withdraw your funds, give them advance notice between 10 to 30 days. As of April 1st, 2025, you earn 2.85%* with the 10 Day Notice Savings Account and 3.00%* with the 30 Day Notice Savings Account. 

A tax-free savings account (TFSA) is best used as an investment account. However, if you’re using it for short-term goals, you may consider purchasing fixed-rate products that earn interest and remain accessible through a TFSA. 

It can earn more interest than in a chequing or savings account. Although it’s liquid, if you decide to withdraw from your TFSA, you’ll have to wait to re-contribute that amount until the following year on January 1.