I will receive a lump sum amount as a voluntary departure pkg. I live in Ontario, Canada and want to know what I should invest this amount in (GIC/Mutual Fund) that will get a high return and be tax deductible?

  • 4
    "Best" is a subjective term and no investment is truly secure. Commented Jan 20, 2011 at 10:51
  • "secure" (in the title) and "high return" (in the question) are mutually exclusive...
    – bstpierre
    Commented Mar 25, 2011 at 12:57

3 Answers 3


I agree that best is subjective and will not give investment advice. However, the tax deductible part can be dealt with quite swiftly. If you need tax deductibility right now, at the expense of later, put it into an RSP account. If you don't need tax deductibility right now, put it into a TFSA. Assuming you have room in either of these vehicles, I would suggest using just an RSP or TFSA cash savings account for now at ING Direct. Three reasons:

  1. You get the immediate benefit of having put it somewhere, and in the case of the RSP, an immediate tax deductibility.

  2. You don't have to worry about rushing into a specific investment and can give yourself time to figure out your goals and portfolio composition. (Read about the Couch Potato portfolio for a starting point.)

  3. You can transfer your money from them for free and still keep it registered in whichever plan it is in.

The last point is the most important for my suggestion. The ability to quickly park the cash in a registered account and to move it for free using the appropriate form at a later date. Most places have a sneaky transfer-out fee. ING may not be the only place that doesn't, but I haven't looked into many other places about this. You might find something else that works the same way.

And please, don't ever use GIC and high return in the same sentence.


Best is indeed subjective. You could for example, get a Universal Life Policy that pays a guaranteed interest on all monies (even those in excess of what you need to pay to cover the policy). Most people will tell you (probably correctly) that using life insurance as an investment vehicle is a bad idea, however.

The growth of the money in a UL policy, however, is usually tax deductible and grows at a guaranteed rate. NWML here in the U.S. pays a guaranteed (unless they go broke I suppose) 4% per year; historically, however, they've been paying 6% per year. That's pretty good, except a lot of your money goes into buying the policy the first few years.


Depends on your definition of "secure".

The most "secure" investment from a preservation of principal point of view is a non-tradable, general obligation government bond. (Like a US or Canadian savings bond.) Why? There is no interest rate risk -- you can't lose money.

The downside is that the rate is not so good.

If you want returns and a reasonably high level of security, you need a diversified portfolio.

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