You have worked hard to build up your savings. Having both a chequing and high interest savings account is an important  aspect of any financial plan. But if you avoid investing, you may miss out on the opportunity to grow your savings. Exploring different short-term and long-term investments options will help you turn your hard-earned savings into more money that you can use toward your financial goals.

“The first step for anyone who is looking to invest should be outlining their goals and building a financial plan.

– Lenny Colangelo, Scotiabank investment specialist

An advisor can help assist in figuring out how short-term and long-term investing can work best for your financial goals. 

“After this is complete and there is a clear plan in place, you can begin to look at specific investment options that are suitable for each goal," Colangelo says.

Think about your financial goals for the next 5 years

When looking for what investments are the right fit for saving for the short term, the answer will depend on what your goals are for the funds. 

“For a savings goal that is truly short term in nature – say saving for a down payment on a new home you would like to buy in two years – it is usually the best option to simply use a safe, liquid, savings option," Colangelo says. "This could be a short-term Guaranteed Investment Certificate (GIC) or a savings account."

Before choosing your short-term investment solution, ask yourself these questions:

  • How much money can I put into a short-term investment without overextending my monthly budget?
  • What is my time frame for my savings?
  • Are there fees and penalties for accessing my money early?
  • How much interest will I earn through this savings product?
  • What is my risk tolerance?

What are short-term investment options?

When will you be using your savings towards your financial goals? Looking at your time horizon is going to be important in deciding what investment options will be right for you. If your savings goal is less than 3 years away, for example if you are saving for a car, consider options like high interest savings accounts and short-term GICs. 

If your goals are in the 3-to-5-year range, you’ll want to consider options like longer-term GICs, High-Interest Savings Accounts, and mutual funds. We’ll break down some of these options below.


GICs work similarly to savings accounts as you can earn interest on your funds without running the risk of losing your original principal investment. However, unlike many savings accounts, GICs are not meant to be touched for a set amount of time. GIC terms are flexible and can range anywhere from 30 days to 10 years, so you can choose the option that works best for your investment goals. The right choice of GIC depends on your financial situation, investment goals, and time horizon.

Learn more about the different types of GICs and how they could work in your plan

High Interest Savings Accounts

If your goals are more short-term than a GIC allows, a High Interest Savings Account (HISA) can better suit your savings needs. Scotiabank's Momentum Plus Savings Account allows Canadians to save for multiple goals in one account, meaning you can set aside money for an emergency fund and your upcoming vacation all in one account. Other HISAs, like Scotiabank's Savings Accelerator Account, allow customers to open their savings account with a non-registered or registered plan, such as a TFSA, RRSP, or RESP, to earn competitive interest rates.

There's no minimum deposit required to open up a HISA, and the deposits are eligible to be insured by the CDIC, which makes this product appealing for investors. Also, many HISAs allow customers to earn interest on all their balances as well as to add money or deduct money to their account at any time without penalty.

Learn more about how different savings accounts work

Mutual funds

A mutual fund is a professionally-managed investment that pools money from different investors to invest in stocks, bonds, short-term money market instruments or other securities. They’re managed by experienced portfolio managers, who decide which investments to hold and when to buy and sell those investments.

Mutual funds can work as both medium-term or long-term investment options, depending on your financial goals and their time horizons. For retirement savings and other financial goals that are longer term, like your child's higher education costs, long-term investment options like balanced or equity mutual funds offer more potential for growth. The value of these types of mutual funds are typically subject to more ups and downs, especially over shorter time periods. That’s why having a longer time horizon (typically five years or more) and a comfort level with at least some volatility is so important because you’ll have the time to make up for any temporary setbacks and commitment to remain invested to reach your goals. 

For investors looking for regular income with less volatility – and less growth potential – there are options, such as equity-tilted mutual funds, fixed income or bond funds. While bonds funds are not without risk, they tend to experience less ups and downs, making them a good potential fit for investors with shorter time horizons, such as three to five years.   

“For someone who is starting out with investing and the goal is longer term, you could consider a mutual fund that includes equity and fixed income investments," says Colangelo, explaining that at Scotiabank these are available with a minimum investment strategy of $500 initially and with as little as $25 each month afterward


Both Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA) allow your investments to grow tax-free. However, with an RRSP, individuals will have to pay taxes when they withdraw their money in retirement or if you choose to withdraw before retirement.

A TFSA uses an investor’s after-tax dollars for investing, and any income earned on your TFSA investments is sheltered from tax. While TFSAs are a great option for retirement savings, the account can also be used for other shorter savings goals, like buying a home or saving for a vacation. 

Ready to move your savings into short-term or long-term investment strategies? Scotiabank has several types of investments that fit your unique budget and financial needs. 

Losing sleep over your investment planning? We can help. Book an appointment with a Scotia advisor