Generally, it's not ideal to keep large amounts of money in cash or a chequing account. While both options offer liquidity and accessibility, they don't provide significant returns and can even lose value over time due to inflation.

 

Here's a breakdown:

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Cash

• Pros:

  • Immediate access

  • No fees​

• Cons:​

  • Risk of theft or loss

  • No interest earned

  • Vulnerable to inflation

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Chequing Account:

• Pros:

  • Easy access to funds

  • Convenient for daily transactions5

• Cons:

  • Low interest rates

  • Potential fees (monthly, transaction, etc.)

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A Better Approach:

 

Consider these strategies for optimizing your money:

• Emergency Fund: Keep a few months' worth of living expenses in a high-yield savings account. This provides easy access and earns a decent interest rate.

• Short-Term Savings: For specific goals like a vacation or a car, use a high-yield savings account.

• Long-Term Savings: Invest in assets like stocks, bonds, or mutual funds through a registered retirement savings plan (RRSP) or a tax-free savings account (TFSA). These can offer higher potential returns over time.

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Remember: The best approach depends on your individual financial situation and goals. It's advisable to consult with a financial advisor to create a personalized plan.

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