GIC's - anything better than Achieva's 5.25%? offshore?

[eurotoby]

heya ppl,

sorry in advance for the newbie financial advice question...

i am planning to sell my house next year and stick all my funds into a GIC or some other form of secure high(ish)-interest account, with the intention of collecting interest every year as kind of a 2nd salary.

obviously the best deal i can find (in Canada) is the achieva/outlook 5-year GIC which offers 5.25% annual interest which does not have to be compounded (i.e. i can take the interest out every year) and this is an okay deal... but is there anything better than that?

I looked at websites of american banks and their CD rates are much higher, one even goes up to 7%, while an offshore cayman islands bank gives off 8%, though that particular bank's website looks kinda shady so i am not going to hand them over hundreds of thousands of dollars anytime soon...

however the american banks are for american residents only it seems, so my question is whether anyone here has any experience with overseas or canadian GIC's/CD's which offer higher interest than 5.25% that are open to canadians, not scams, and putting money in them is legal for canadians (assuming i pay taxes on them etc.)

i have met with a TD Waterhouse advisor before and he spoke of an average of 8% return on a conservative-risk package of investments... but i would rather have a definite 5.25% return than an assumed 8% one... am i right to dismiss these types of investments altogether?

Would appreciate any help =)

[nolookingca]

Keep in mind the USD is going in a downward direction. That extra 1.75% might not be worth it.

[Sleeper]

Keep in mind the USD is going in a downward direction. That extra 1.75% might not be worth it.

Yes - currency issues are a problem. Without going into too many details, consider these concepts of international finance:

1) Expectations theory of forward exchange rates
2) Purchasing power parity
3) International Fisher effect
4) Interest rate parity

Having considered the above, methinks you should go for the pound sterling. Considering ING DIRECT's 4.5% savings rate in the UK, you'll have no problem making money over there.

[eurotoby]

Having considered the above, methinks you should go for the pound sterling. Considering ING DIRECT's 4.5% savings rate in the UK, you'll have no problem making money over there.

To be eligible for a savings account at ING Direct in the UK (ingdirect.co.uk), you have to be a UK resident for at least 6 months out of the year, according to the FAQ on their website... i wouldn't be able to deal with the constant rain :) thanks for the suggestion though!