Author Topic: Where to park money during renovation - Canada  (Read 275 times)

AnotherCanuckStasher

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Where to park money during renovation - Canada
« on: May 18, 2019, 02:30:30 PM »
A friend of mine is taking equity (about $300,000) from one property to do a major addition and renovation to another property.  The renovation will take place over 1 year to 18 months.  He has parked the initial loan into a high interest savings account with a high 90 day promo rate but asked me for suggestions on what to do with it after that.  Obviously, he will need to take large sums of money out as work is completed but that will happen regularly over the course of the project.  Any suggestions?

SunnyDays

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Re: Where to park money during renovation - Canada
« Reply #1 on: May 20, 2019, 10:06:36 AM »
My credit union offers a savings plan that pays daily interest for just this type of situation, but offers only 1.15%, as opposed to the regular savings rate of 2.55%.  So depending on how often money will be withdrawn, either of these types of plans would work, or maybe a combination of them both.  If there will be frequent, smaller withdrawals, then that should come from the special savings plan (called a Plan 24 in my case), so that interest for the month is not lost, and more infrequent withdrawals could come from the regular account where interest is paid monthly.

daverobev

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Re: Where to park money during renovation - Canada
« Reply #2 on: May 20, 2019, 02:00:16 PM »
GIC ladder.

https://www.oaken.com/gic-rates/

3.05% for an 18 month one!