TD Canada Trust - Fixed Income (2024)

FAQs

TD Canada Trust - Fixed Income? ›

A fixed income investment provides a fixed rate of return for a set period of time. Whether in bonds, GICs, or money market instruments, fixed income securities have less correlation with the stock market than equities – and can involve less risk.

A fixed income investment provides a fixed rate of return for a set period of time. Whether in bonds, GICs, or money market instruments, fixed income securities have less correlation with the stock market than equities – and can involve less risk.

Fixed income investments can be purchased from your local TD Canada Trust Branch, through TD Waterhouse, or from TD Evergreen Investment Services. Term Deposits and Guaranteed Investment Certificates (GICs) are another form of fixed term investment. They offer a specific rate for a pre-determined period of time.

Fixed-income investments such as bonds and guaranteed investment certificates (GICs) are an important part of a well-diversified portfolio. Fixed-income investments pay interest at specified times in fixed amounts and are usually issued by a corporation, municipality, government or government-sponsored agency.

Fund Overview

The fundamental investment objective is to seek to earn interest income by investing primarily in, or gaining exposure to, Canadian dollar-denominated fixed income securities.

Because fixed income typically carries less risk, these assets can be a good choice for investors who have less time to recoup losses. However, you should be mindful of inflation risk, which can cause your investments to lose value over time. Fixed income investments can help you generate a steady source of income.

Treasury bonds and bills, municipal bonds, corporate bonds, and certificates of deposit (CDs) are all examples of fixed-income products.

To sum these up, GICs offer guaranteed returns based solely on the interest earned on the GIC by its maturity, while fixed income funds provide broader opportunities for a range of investments offering both income / yields and total returns.

Fixed-income securities are debt instruments issued by a government, corporation or other entity to finance and expand their operations. They provide investors a return in the form of fixed periodic payments and the eventual return of principal at maturity.

There's no particular significance to a return of 5 per cent – it's just a nice, round number that corresponds to the lower range of what you might expect from stocks on an average annual basis. Adjusted for their near-zero risk profile, GICs at 5 per cent look pretty good to many investors right now.

What is the difference between mutual fund and fixed income? ›

While Fixed Deposits are considered a traditional, safe investment option, Mutual Funds offer the potential for higher returns through market exposure. It is important for investors to understand the difference between fixed deposit and mutual fund, their characteristics and nuances before making investment decisions.

Fixed income funds are mutual funds that invest in high quality fixed income securities like government debts, treasury bills, money markets, etc. and pay the investors a fixed rate of return as per the payment terms and period.

The fund invests mainly in a mix of Canadian stocks and bonds, with a focus on generating income. Up to 30% of the fund may be invested in foreign securities. The charts below give you a snapshot of the fund's investments on May 31, 2022. The fund's investments will change.

FAQ's on Investing $10,000

You could buy stocks, which may give you a return on your investment (ROI) if the company you choose performs well. However, stock prices can also go down, so there is a risk that you could lose money on your investment. Another option would be to invest in bonds, mutual funds, or ETFs.

Reinvest Your Payments

The truth is that most investors won't have the money to generate $1,000 per month in dividends; not at first, anyway. Even if you find a market-beating series of investments that average 3% annual yield, you would still need $400,000 in up-front capital to hit your targets. And that's okay.

High-quality bonds and fixed-indexed annuities are often considered the safest investments with the highest returns. However, there are many different types of bond funds and annuities, each with risks and rewards. For example, government bonds are generally more stable than corporate bonds based on past performance.

Equity markets offer higher expected returns than fixed-income markets, but they also carry higher risk. Equity market investors are typically more interested in capital appreciation and pursue more aggressive strategies than fixed-income market investors.

Understanding fixed income investments

Bonds, such as U.S. Treasuries and corporate or municipal bonds, are traditional types of fixed income investments. Investors may also consider mutual funds and ETFs that hold fixed income investments.

How do I buy fixed income securities? ›

The easiest way for the individual investor to access diversified fixed income investments is through bond mutual funds and bond exchange-traded funds (ETFs). Fixed Income Mutual Funds. These funds are a popular way for average investors to own fixed income.

Disadvantages of GICs

Not all investment returns are taxed equally, and unlike capital gains and dividends, interest income earned from GICs is fully taxable in the year received. GICs typically offer very low returns, especially after accounting for taxes and inflation, which can erode your purchasing power.

A Canadian Dollar Term Deposit may be an ideal investment option if you: Prefer a safe, secure, fixed-term investment. Want the flexibility of being able to redeem your original investment prior to maturity. Are looking for a guaranteed rate of return on your savings.

You can go online to the fixed income site on WebBroker to trade many different types of bonds. You may also contact TD Direct Investing at 1-800-465-5463.

For now, GICs with rates of 5 per cent or slightly more are still available from one or more alternative banks and credit unions for terms of one, two, four and five years. The most plentiful selection is for the one-year term.

A guaranteed investment certificate (GIC) is considered one of the safest ways to invest. It's an investment that works like a special kind of deposit. You are guaranteed to get the amount you deposited back at the end of the term (a set number of months or years).

What does TD mean in lending? ›

A Term Deposit (TD), also known as 'fixed deposit' is a deposit that is held at a financial institution for a fixed term.

Fixed Rate Advantage Option

Set up regular payments with a fixed interest rate for all or part of your revolving balance. At the end of your term, any remaining balance returns to the revolving portion of your Line of Credit.

Fixed-Income securities are debt instruments that pay a fixed amount of interest, in the form of coupon payments, to investors. The interest payments are commonly distributed semiannually, and the principal is returned to the investor at maturity. Bonds are the most common form of fixed-income securities.

A term deposit is often used when the deposit is extended for a certain period, say 3 months, 6 months etc. Fixed deposits, on the other hand, are used when the deposit is for a period of 6 months or greater than that. The deposit amount offers a higher rate of return as compared to the banks' savings accounts.

A Fixed Deposit is kept for a longer period and hence it earns a higher rate of interest. A Recurring Deposit takes a defined sum and invests it every defined period. This means each instalment earns interest for a lesser period than the previous instalment.

¹. Interest Rate. 8.99%–21.99% Loan amount.

A trust deed—also known as a deed of trust—is a document sometimes used in real estate transactions in the U.S. It is a document that comes into play when one party has taken out a loan from another party to purchase a property.

The average 1-year fixed insured mortgage rate from the 6 main banks in Canada is 6.47%. The average from a basket of 11 lenders in Canada is 6.45%. The average 3-year fixed insured mortgage rate from the 6 main banks in Canada is 5.82%.

What are two negatives features of a fixed-rate mortgage? ›

Fixed rate mortgage negatives include a higher interest rate and monthly payment relative to an ARM or interest only mortgage and being locked into the mortgage if you cannot refinance.

Pros of a fixed-rate mortgage

Rates and payments remain constant. Monthly stability of payments makes household budgeting easier. Simple to understand, especially for first-time buyers.