Valley First

Term Deposits vs. Mutual Funds

How are term deposits different than mutual funds?

You've probably heard it's important to have a diversified investment portfolio, but how can you find the right balance between higher and lower risk investments? The key is to have a properly allocated investment plan and then stick with that plan, rather than chase returns.


Term deposits

In general, term deposits are low-risk investments offering a guaranteed return. They come in two forms, redeemable and non-redeemable. Redeemable means that you can access your cash if you need to after a certain date, usually at a lower interest rate. Non-redeemable usually carries a higher rate of return but you won't have access to your money for a determined period of time.

Both products are dependable low-risk savings vehicles.


Mutual Funds*

Mutual funds provide a variety of investment options with varying degrees of risk and potential return. For the average investor, mutual funds are a convenient and affordable way of gaining access to investments that would otherwise be available only to large institutions or the wealthy. These investments are selected by experienced professionals who devote themselves exclusively to tracking the markets, analyzing investments, and implementing a consistent investment strategy.

There are a variety of mutual fund categories, including Managed Portfolio (or Fund-of-Funds) Solutions. Each offers a range of funds suitable for every type of investor, from the most conservative to the most aggressive.

Since mutual funds qualify as securities and not deposits, they are neither guaranteed nor insured, which means the rate of return fluctuates over time and as a result are often a better longer term investment option.

Ultimately, the best advice is to go get some free advice to build a retirement savings plan customized to your unique situation. Call or visit your nearest Valley First branch and speak to an accredited advisor.


*Mutual funds, other securities and securities related financial planning services are offered through Qtrade Advisor, a division of Credential Qtrade Securities Inc. Mutual funds and related financial planning services are offered through Qtrade Asset Management Inc.


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