Q: Can you comment on the relative returns of CASH versus CIB238 CIBC MON MKT FP /NL'FRAC. Today's rate for CIB238 shows 3.97% but this has been slowly going down as rates drop. For parking money for a few months up to a 6 months, which offers the best return?
5i Research Answer:
Any short term fund is going to experience rate pressure these days as market rates in Canada adjust to multiple Bank of Canada interest rate cuts. CASH indicated yield is lower at 3.72%, and typically money market funds will provide a higher income because they are mostly corporate securities. We would prefer the money market fund, but the difference is neglible. Six month GIC rates are also an option, at 3.80% with a full guarantee to $100,000.