On a daily basis, we are flooded with information relevant to personal finance. Whether it is via the newspaper, radio and television, understanding financial information can be challenging, however; it is necessary to become financially literacy to manage money efficiently.
Here are six of the most common rates that you should know especially if you are seeking to plan your financial future.
- Prime Interest Rate
The prime interest rate is the most often mentioned rate in the news. Commercial banks charge this rate to their most credit-worthy customers which are mostly made up of large companies. The prime rate is also important for you because it directly affects the lending rates which are available for mortgages, small businesses and personal loans. Your bank will subtract a few percentage points from the prime rate to set their own rates to apply to their respective financial products. The prime interest rate can be found at the Bank of Canada’s website.
- Foreign Exchange Rates
Planning a trip out of the country in the near future? Consider monitoring foreign exchange rates. Exchange rates are determined in the foreign exchange market, which is open to a wide range of different types of buyers and sellers where currency trading is continuous: 24 hours a day except weekends. Using websites such as xe.com or gocurrency.com, you can track and figure out how much the exchange rates are (minus the service fees charged by banks or currency exchange houses). Knowing the particular exchange rate will assist you in establishing a budget for your trip.
- Interest Rates On Savings
As an individual who wish to start saving money on a regular basis, you should be aware of which financial institution is offering the best interest rates on savings. These particular rates are calculated by using the prime interest rate and the amount of money in your account. Depending on the type of saving account, not all banks offer the same interest rates. Virtual banks such as Tangerine, offer higher rates that traditional retail banks. For more details, visit the banks’ websites to compare their interest rates.
- Credit Card Rates
One of the common misconceptions regarding credit cards is that all of them are offer the same interest rate. Although the rate is calculated by the two methods: i) Average Daily Balance Method and ii) Daily Balance Method, you can use the web to learn more about current card rates. By visiting CreditCard.com Canada, you can have a comparison of the different selection of cards based on low interest rates and other criteria. (If you find a better credit card rate and incentives during your research, do not be afraid to switch.)
- Personal Loan Rates
If you see yourself in need of money in the short term, a personal loan from a financial institution is an option. Rates on personal loans are meant to generate a profit for the bank while the money is in your pocket. When applying for a loan, you must investigate the fixed and variable rates that are being offered. For each rate, there are advantages and disadvantages to consider depending on a number of factors including the amount of the loan, how long it will take you to repay the total amount, etc. It is best to consult the websites of different banks to know about the different rates on loans.
- Sales Tax Rates
Planning on taking a trip of out the province of Quebec? If you are planning to spend money in different Canadian provinces, then you should know about the three types of sales tax rates: Provincial sales taxes (PST), Goods and Services Tax (GST) and Harmonized Sales Tax (HST). In some provinces such as British Columbia, Saskatchewan and Manitoba, both the PST and GST are charged on the original price on a good or service. A Harmonized Sales Tax (HST) is a single tax that contains the combination a provincial tax and federal tax. Provinces that levy HST are Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. Alberta, Northwest Territories, Nunavut and Yukon are the jurisdictions that only charge GST to purchase items. Visit the Retail Council of Canada website to know the specific sales tax rates in each province and territory.
In order to become increasingly financial literate for your future, it is recommended that you take the time to read everything regarding personal finance on a daily basis and monitor the different rates that will affect the money in your pocket and bank account.