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THE HERALD Wednesday February Page Accountants say interest rates can be deceptive By Peggy Mulligan C A When read a good detective novel were keenly aware that things arc not always what they seem to be Yet wc rarely have the same awareness when stash our hard earned money in the bank I he fact is however that in bank ing as in sleuthing it is usually profitable lo investigate beyond seems to be the obvious When you open a bank account Tor example you may be told that it iams6pcrccntmterest straightforward enough But did you know that there arc two ways that per cent can be calculated and that one of them actually earns slightly more money than the other Interest can be quoted at a or an effective rale sometimes known as real If you have SI 00 in your bank ac count and it earns 6 per cent inter est compounded semiannually you are actually earning slightly more than 6 per cent Heres how the real rate works For die first half of the year your earns 3 percent interest That interest is compounded six months after you open your ac count That is the S3 remains your account and you now begin to cam interest on that interest For the remaining six months you earn Understand rate options In order to get maximum earning power from your saving it is important lo understand in crest rate opuons It is also vital lo understand the power of com pounding as banks offer a ing array of compounding opuons as well Perhaps the mosi dramatic ex per cent on your S100 plus per cent on your S3 of interest At the end of 12 months you have 09 This means you earned percent on your S100 and per cent on the interest SO a real rate of 6 per cent By ompjnson with an effective interest rate of 6 per cent com pounded semiannually you end up with precisely SI06 at the end of 2 months In essence the effective rate means lhat the bank agrees to pay you per cent on your 1 at the end of the months There fore you actually cam slightly less than per cent interest every six months so thai when the interest is compounded your earnings after the full months will work out to SI You can start CPP benefits at age 60 Did you know you can start to col lect your Canada Pension Plan retirement benefits at any time after birthday You dont have to wail to If you declare that you have sub stantially ceased empymcni which CPP interprets to mean lhat your annual earnings from employ ment or selfemployment wont ex ceed the current maximum of a year then youre pen sionable For each month short of your 65th birthday ihe pension you receive is reduced by 5 per cent From then on your monthly cheque will be in dexed wont suddenly jump to the age 65 level when you pass that birthday Incidentally it works the oihcr DONT FACE THE NEW TAX LAWS ALONE With the sweeping changes in the tax laws many Canadians are confused as to how their income tax returns will be affected At HR Block we have the answers Our specially trained tax preparers will always find you every deduction and credit to which you are entitled Come to HR Block this year well get you the biggest refund you have coming IF THIRfS A TIME FOR BLOCK itsnow North Moore Park Plaza Georgetown 8 Mill SI East 8531771 way around loo so thai your pen sion increases each month you dont collect after age to a maximum of per cent at age which is the latest you can apply BRIAN QOODLET can help you choose the thats right for you The Mutual Group has a full range of Registered Retirement Savings Plan investments Let me help you make the choice that best for your needs For personal service call me Leaned with Mutual of CinadiMutuil two of The Group I The Mutual Group Facing Tomorrow Together Rait- subject change 14 BONUS When you make your contribution to a year TERMRRSP at First City Trust youll earn an automatic BONUS above our posted rate See your First City Trust branch staff or authorized agent for details Offer valid through March 1 Take advantage of the exclusive First City Trust RRSP Retirement Forecast a computer projection of your personal RRSP savings Its yours for the asking when you make your contribution Existing deposits or Iramlen arc not eligible lor this Offer subject to withdrawal Jl any time Exclusively for personal investment savings YOUR AUTHORIZED AGENT IS- JACK BOULET SUTHERLAND INVESTMENTS CORPORATION STOCKMAN CRES GEORGETOWN 8770949 ample of the power of compound ing is one that is familiar to many the If you invest at 10 per cent compounded annually in years your would be worth 56527 Invested instead at 10 per cent compounded semi an nually your S 1 000 would grow to 7040 over the years If it seems to be a lot of work to wade through and compare the bcnclits of different types of bank accounts with different interest rales and varying compounding op tions remember irul you worked turd for your money so you should make it work hard for Mulligan is with Price Chartered Accountant Associate Tax Consultants INCOME TAX RETURNS DONE Won Thurs 900 530pm Friday 9 00 am 700pm Saturday 9 300pm 101 GUELPH ST GEORGETOWN 8772217 SPECIAL OFFER WHEN WE DO YOUR INCOME TAX RETURN WE GUARANTEE DELIVERY TO TAXATION DATA CANADA THE NEXT DAY BY COURIER AT NO EXTRA CHARGE RRSP results that speak for themselves INDUSTRIAL DIVIDEND FUND 143 164 154 16 INDUSTRIAL EQUmf FUND 169 119 no 14 2 155 INDUSTRIAl FUTURE FUND 165 INDUSTRIAL GROWTH FUND 143 15 17 INDUSTRIAL HORIZON FUND 140 INDUSTRIAL INCOME FUND 116 137 158 12J INDUSTRIAL FUND 132 8 142 165 MACKENZIE EQUITY FUND 28 8 134 153 150 MACKENZIE MORTGAGE a INCOME FUND 126 138 152 162 FOR MORE INFORMATION ON THESE AND ANY OTHER RASP INVESTMENTS CONTACT REGAL CAPITAL C Georgetown Ont LTD Phone 416 OVER YEARS OF HELPING CANADIANS REACH FINANCIAL INDEPENDENCE The Industrial Group or Funds Mackenzie Financial Corporation Looking both ways To manage your For growth and income figures to January 31 are average annual compound returns based on tie net income invested and including of dividends Past is not necessanfy indicative of future results Any offer only by prospectus vim contains complete details of all charges Please read it before making a purchase and retain it for future reference