I have about $20,000 just sitting in a TFSA, I do plan to spend it (on a vehicle) in about 12-16 months, so I don't want to lock it away, is there anything better then the TFSA? I am Canadian.


A TFSA is probably the best place to hold your money for a short-term savings like that. The issue is that a TFSA is essentially just a bucket that can hold assets-- you can have stocks, bonds mutual funds, GICs etc... inside your TFSA. I believe the question you're asking is what should you invest in that will earn you some interest over that period but still keep your money liquid enough to use.

For short-term savings like that I'd suggest a money-market fund or high-interest savings account. Something that's going to earn you 2-3% interest annually. Which will save you about $510 -- these are comparable to rates you'd achieve with a GIC and have the benefit of not being a fixed term -- i.e can be withdrawn at any time.

You'd probably be better off buying a cheaper car though and parking your savings in something like an index fund which will earn closer to 10% annually (e.g. if you bought a $5000 car instead and invested the remaining $15000 you'd have ~24K 5 years later minus whatever extra you spend maintaining a cheaper car)

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  • "which will earn closer to 10% annually" is a bit ambitious, requiring one to be 100% in volatile growth stocks. – RonJohn Dec 29 '19 at 21:46

You could do a 12 month GIC and try to match inflation

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  • Please add more information regarding why somebody should do this. – mhoran_psprep Feb 11 at 13:59

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