It may seem particularly challenging right now to save for the future, but we promise there’s a way. Even though inflation and rising interest rates have dimmed economic forecasts for the next couple years, there are still great savings and investing opportunities available.
You could put your money in a savings account. That would help you build cash reserves for big purchases, emergency funds, and other assets that keep your business going strong. Having lots of cash on-hand can even make applying for future loans easier, as it proves you’re creditworthy. Savings also demonstrate to potential investors that your business can weather a rough economy and stay operational, because you’ve put aside money for unexpected events.
However, while savings are essential for your business’ success, the interest you earn on them might not be enough for you to keep up with inflation.
Get rates on your terms.
If you’re looking for an investment with a bit more flexibility, ask your advisor about redeemable GICs. They’re secure, low-risk investments that offer the flexibility to redeem your savings with interest, any time after a certain number of days. They often come with a two-tier rate of return that grows as you get closer to term maturity. Your principle investment is always protected and with a guaranteed return, the longer you stay the more it pays.
Invest in the market with less risk.
Most market-linked GICs provide the guaranteed minimum returns of regular GICs, with the potential for extra growth that comes from being linked to the stock market. They’re ideal investments for small business owners who want to protect their initial investment while gaining low-risk exposure to global stock markets and growing their money over time to reach a long term goal.
Grow your funds even more with mutual funds.
Another great long term option for investing in the stock market and growing your savings is to invest via mutual funds. The potential for higher rates of return on your investments gives you the opportunity to reach your goals sooner, and are an ideal way to make your savings more resilient against inflation.
With mutual funds, you don’t have to stress about picking stocks and building a portfolio. Expert portfolio managers craft these funds in order to provide you with a diverse set of stocks that meet your particular needs, whether you’re a conservative, moderate, or growth-focused investor.
Speak with your advisor about which mutual funds are right for you.
Keep your options open.
When it comes to investing, flexibility is key. Mutual funds are better for long-term goals. GICs can help you save for short-term needs or keep your money growing for months and years at a time. Keeping money in a savings account lets you make the most of opportunities as they arise. Each of these options come with their own benefits. So, when you’re thinking about how to save for the future, why limit yourself to just one option?
Speak with an advisor today.
It may seem harder than ever for small businesses to save money. With inflation at record levels and interest rates not far behind, every penny matters. Your business needs an advisor who will take the time to listen and understand your needs, who will give you the kind of advice that makes sense for your unique situation, and who will always have your back. Our advisors deliver all this and more, because what matters to you matters to us.
Let us show you how your business can cut costs today. Speak with one of our small business experts when you visit a Coast Capital branch or call us at 1.888.517.7000.