Making rising interest rates work in your favour, experts say

Since the beginning of this calendar year, the Bank of Canada has raised its benchmark interest rate five times.

And while there are concerns about the impact on people’s bottom lines, a financial adviser says the hikes may present an opportunity for some.

“Rising interest rates don’t necessarily mean a lifestyle change or something to worry about,” said financial adviser Kevin Kranzler.

The central bank interest rate is currently at 3.25%. Kranzler suggests making this number work for you.

“(If) you have a little extra money sitting there, throwing it into a savings account isn’t a bad idea,” Kranzler said.

Read more:

Ways to manage your money when interest rates rise

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“He will pay interest a bit higher than in the last two months. As interest rates go up, the interest rates on your savings account go up as well.

He adds that there are other options available if you are considering diversifying your portfolio.

“It’s also a great time to enter the market, not just in bonds or (guaranteed investment certificates) but in real stocks,” Kranzler said.

And these high rates could persist.

Read more:

Not all Canadians feel the pain of rising interest rates. Here’s why that might change

“We are almost certain to see some uptick in interest in the near future. At least, maybe two or three more,” said Vishaal Baulkaran, associate professor of finance at the University of Lethbridge’s Dhillon School of Business.

While Baulkaran acknowledges that people can take steps to use the current economic climate to their advantage, he also believes most Canadians won’t see any significant upside for several months.

“The biggest winner for individuals would be in the more medium term, if the Bank of Canada is able to get its monetary policy right and those interest hikes tame inflation,” Baulkaran said.

A plan that many would like to see produce results as soon as possible.

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Inflation puts pressure on Lethbridge businesses


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