Scotia iTRADE

When we think of vacations, we like to think of fun, relaxation, and seeing family and friends – the things that make life worth living, and that are worth saving for. But there are some ways to save for a trip other than just putting coins in a piggy bank - Scotia iTRADE® offers a number of ways you can invest to help you meet any short term savings goal – even the vacation of your dreams.

Your first step will be building a budget. Figure out how much you need to spend, how much you have, and the difference you’ll need to make up. Budgeting is also a great time to set your expectations for the purchase. What is a reasonable amount for a person with your finances to spend on a vacation? How long would it take save up for it? Can you afford it outright, or will you have to finance it? How much will you spend on meals each day? What insurance will you need? Try to be as realistic and specific as possible – after all, you won’t be able to really enjoy your time off if you’re constantly worried about overextending yourself.

You’ll also want to think about the timeline – if you can’t afford it now, how long will you have to save until you can? The amount of time you have to invest may change what type of investments you consider. For most big purchases, a timeline of one to four years is typical. To help keep yourself on track, choose a specific monthly investment, or specific yearly targets – after all, even the biggest journeys consist of small steps.

Below are investment types that have a low to medium risk for you to consider. Click here to learn the different investment options available to you.

High Interest Savings Accounts: these savings accounts generally offer better returns than regular savings accounts, usually in exchange for certain restrictions – for example, a guarantee that you won’t withdraw for three months.

Instrument type: cash.
Pros: low risk, secure returns, higher returns than traditional savings account.
Cons: low risk can mean lower returns compared to some other instruments.

GICs: investments where you agree to lend money to a financial institution for a set amount of time, with a guarantee that you will receive at least your investment back. You’ll earn interest at a fixed or variable rate over this period.

Instrument type: debt.
Pros: short term, low risk, secure returns, higher returns than traditional savings accounts.
Cons: low risk can mean lower return compared to some other instruments.

Money Market Funds: a type of mutual fund designed for short-term, low-risk, secure investments. Normally, money market funds invest in short-term, reliable securities like Treasury Bills and Commercial Paper.

Instrument type: debt.
Pros: short term, low risk, secure returns, no loads.
Cons: not covered by federal deposit insurance.

Mutual Funds:  provides investors with access to professionally managed, diversified portfolio of investments

Instrument type: equity/debt.
Pros: diversified, managed by an expert, medium liquidity, affordable.
Cons: loads and fees can affect your overall return, and the return is not secure .

ETFs: Exchange Traded Funds, or ETFs are professionally managed diversified portfolio of investments that trade on the exchange, similar to stocks trading on the exchange.

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Instrument type: equity/debt.
Pros: highly liquid, potentially diversified investments, often with lower risk than individual stock.
Cons: Management expenses can affect your overall return, and the return is not secure.

These options take more thought and effort than a piggy bank, but they offer the possibility of higher returns, and may make your dream vacation a reality. They are also all available through Scotia iTRADE, along with webinars, articles, and videos to help you choose the best investment vehicle for you. 

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