As mentioned in an earlier post, we have chosen to use the following methods to fund our retirement:
▪︎RRSPs – Registered Retirement Savings Plan
▪︎Premiere plan – a savings / investment account at our credit union
Today, we will share what we know about the Premiere Plan *please note this plan and the details are specific to our credit union* A Premiere Plan is an investment account, where the interest rate increases every year over a 5 year period.
- It requires a minimum opening investment of $3,000 and you can invest up to $750,000
- Currently carries a lifespan of 5 years
- The interest rate is predetermined by our institution and those predetermined rates are guaranteed for the duration of the plan; I.e. Should interest rates take an unfavorable turn, we would still be entitled to the initial rates offered.
- Withdrawals and deposits can be made without incurring fees or penalties.
- The interest rate gradually increases each year for the plan duration. e.g:
- year 1 – 1.25%
- year 2 – 1.50%
- year 3 – 1.75% etc.
We really couldn’t think of many disadvantages of the PP, other than over the years we’ve seen a continuous reduction in the interest rates offered. This may be directly correlated with the state of the economy over the years.
Final synopsis: this plan is a favorite for us. It fits my risk averse nature well 😁
Are you team premiere plans or nah? Do you know of any other financial vehicles similar to the PP?
We’ll discuss mutual funds in an upcoming post