Merquise Posted May 16, 2013 Report Share Posted May 16, 2013 With the low prime rate interest banks offer, it doesn't seem unreasonable to consider allocating a part of it for investment. Has anyone given this a shot? Will doing this bring any problems with student loans and/or bursaries? Thanks in advance! Link to comment Share on other sites More sharing options...
mavrik13 Posted May 16, 2013 Report Share Posted May 16, 2013 With the low prime rate interest banks offer, it doesn't seem unreasonable to consider allocating a part of it for investment. Has anyone given this a shot? Will doing this bring any problems with student loans and/or bursaries? Thanks in advance! People have thought of this, but wouldn't recommend it. Any 'safe' investment won't give you a return greater than prime, any investment that could potentially give you an investment above prime has an aspect of risk to it. IMO, it's not worth taking any risk with money that you can't repay for close to a decade. Link to comment Share on other sites More sharing options...
chicagoschool Posted May 17, 2013 Report Share Posted May 17, 2013 I have known people whom, through various flaws in the government student loan funding model, have been able to simply borrow large wads of cash interest-free and then invest it at no cost while in school in something like gold or an indexed fund. Not suggesting this becuse I find it to be a highly suspect form of cronyism. Link to comment Share on other sites More sharing options...
rmorelan Posted May 17, 2013 Report Share Posted May 17, 2013 Some have but you have to really careful to make sure you are safe of course with respect to paying costs of school etc. One obvious drawback is you would have assets at that point - which means you get significantly less money from OSAP (which you often don't pay back), and no bursaries. Both of which can equal very significant returns (10s of thousands of dollars, risk free) - when you factor in the tax you will trigger on the investments, the risk etc it makes things less ideal. Basically look at the entire picture Link to comment Share on other sites More sharing options...
RbcUBC.Med/Dental.LOC.rep Posted May 18, 2013 Report Share Posted May 18, 2013 With the low prime rate interest banks offer, it doesn't seem unreasonable to consider allocating a part of it for investment. Has anyone given this a shot? Will doing this bring any problems with student loans and/or bursaries? Thanks in advance! Hi, As someone who get this question from students all the time, here is my 2 cents. You signed a LOC with an iron-clad rate of Prime + 0.000%. The only way you will make money from an investment is if your advisor is willing to give you a notarized letter/sworn statement promising that your rate of return will always be greater than the sum of Prime interest and the bursary you are forgoing. I doubt any investment advisor is willing to do that. Also, this LOC is for educational purpose only. So if you are to use money aside from education and living expenses, and without first clearing it with your loan officer at the bank. The bank may choose to cap the limit and ask you to pay back everything. I have never done so, but I do have the right to enforce it. Its written in the 8-9 page contract that you sign for the LOC. You are already investing a ton of time and money (in this case $250k or more) into your education, how do you find the time to monitor the market? Thanks and let me know if I can be of help, Da Ke Zhao Student Lending Coordinator RBC Wesbrook Village Branch 604-221-5736 da-ke.zhao@rbc.com Link to comment Share on other sites More sharing options...
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