Guaranteed Investment Certificates are another investment alternative. The longer money is left to compound, the more dynamic the results. Your money might not be as easy to get at in a GIC as it is in your savings account. But in the long run, discipline is its own reward. The fact is, most solutions to financial problems are as easy as this.
Intelligent investors can apply sound logic, if they understand some basic principles.
The more frequent the compounding, the greater the return. The nominal interest rate and effective interest rate are terms used to describe this relationship. The nominal interest rate is the rate typically published by financial institutions in their advertising. The effective interest rate is the rate you, as the borrower, actually get. To put this into perspective, look at a typical example.