When it comes to managing idle cash in your investment portfolio, most Canadians think of high-interest savings accounts (HISAs) or money market funds. But there’s another option that has been gaining popularity—CASH.TO.
Whether you’re waiting to deploy your money into stocks, need a place to park cash between trades, or just want a safe way to earn interest without locking your money into a GIC, CASH.TO could be a great choice.
In this guide, we’ll break down everything you need to know about CASH.TO—how it works, its advantages and drawbacks, and how it compares to other cash alternatives.
Table of Contents
What is CASH.TO?
CASH.TO is the ticker symbol for the Global X High Interest Savings ETF, an exchange-traded fund (ETF) listed on the Toronto Stock Exchange (TSX). Managed by Global X Investments Canada Inc., this ETF provides investors with a secure and flexible way to earn interest on cash while maintaining liquidity.
Instead of letting cash sit in a bank account earning little to no interest, CASH.TO pools investors’ funds and deposits them into high-interest savings accounts (HISAs) at major Canadian banks. This pooling allows it to secure higher interest rates than an individual investor might get on their own. The interest earned is then passed back to ETF holders through monthly distributions.
Since CASH.TO trades on the TSX like any other stock or ETF, investors can buy and sell shares throughout the trading day, offering both competitive yields and daily liquidity. This makes it an attractive option for those looking to park cash while still earning a return.
How Does CASH.TO Work?
When you invest in CASH.TO, your money is combined with that of other investors and placed into high-interest deposit accounts at several of Canada’s leading banks, including National Bank, Scotiabank, and CIBC.
By aggregating substantial sums, the ETF can negotiate higher interest rates than those typically available to individual investors. The interest earned from these deposits is then distributed to shareholders on a monthly basis.
Here’s a simple breakdown of how it works:
- You buy shares of CASH.TO through a brokerage account, just like you would buy stocks or ETFs.
- The ETF pools investor funds and deposits them into high-interest savings accounts at multiple banks.
- Banks pay interest on these deposits.
- Interest is passed on to investors as monthly distributions.
Since the underlying assets are savings accounts at regulated Canadian banks, the risk is extremely low.
Share Price Dynamics
The share price of CASH.TO is designed to maintain a minimum net asset value (NAV) of $50. Over the course of the month, as interest accrues, the share price gradually increases.
For instance, if the monthly distribution is $0.20 and there are 20 trading days in the month, the share price would rise by approximately $0.01 each day, reaching $50.20 on the ex-dividend date. After the distribution is paid out, the share price resets back to $50.
This predictable pattern ensures there is no specific advantageous or disadvantageous time to buy or sell shares, as the accrued interest is reflected in the share price.
However, since the shares are traded on the TSX, the price may still fluctuate based on market sentiment. As a result, there may be times when the share price is higher or lower than its previous day’s NAV.
Benefits of Investing in CASH.TO
Investing in CASH.TO offers several advantages:
- Competitive Yields: With interest rates higher than traditional savings accounts, CASH.TO provides an attractive option for those seeking better returns on their cash holdings. As of March 10, 2025, the annualized distribution yield was approximately 2.69%.
- Liquidity: Unlike Guaranteed Investment Certificates (GICs), which often require locking in your funds for a set term, CASH.TO allows you to buy or sell shares on the TSX at any time during trading hours, providing flexibility to access your funds when needed.
- Monthly Distributions: Investors receive interest income monthly, offering a regular and predictable income stream.
- Low Management Fees: With a management expense ratio (MER) of 0.11%, a significant portion of the returns is passed on to investors.
- Diversification: By investing in deposit accounts across multiple reputable Canadian banks, CASH.TO mitigates the risk associated with any single financial institution.
- Easy to Hold in Registered Accounts: You can hold CASH.TO in registered accounts like:
- TFSA (Tax-Free Savings Account) – Earn interest tax-free.
- RRSP (Registered Retirement Savings Plan) – Grow your cash savings tax-deferred.
- RESP (Registered Education Savings Plan) – Keep education savings liquid.
- FHSA (First Home Savings Account) – Earn interest tax-free while saving for your first home.
- RRIF (Registered Retirement Income Fund) – Use it to hold cash while drawing income.
Potential Risks and Considerations
While CASH.TO presents numerous benefits, it’s essential to be aware of potential risks:
- Lack of CDIC Insurance: Unlike traditional savings accounts or GICs, deposits held within CASH.TO are not insured by the Canada Deposit Insurance Corporation (CDIC). However, since the funds are placed with major Canadian banks, the risk of default is relatively low.
- Interest Rate Fluctuations: The yield on CASH.TO is influenced by prevailing interest rates. If market rates decline, the returns from CASH.TO may decrease accordingly.
- Tax Implications: Distributions from CASH.TO are considered interest income and are taxed at your marginal tax rate. If you hold CASH.TO in a non-registered account, the interest earned is fully taxable as income. If possible, hold it in a TFSA, RRSP or FHSA to minimize taxes.
- Brokerage Fees: Since CASH.TO is an ETF, you may need to pay trading commissions when buying or selling. Some brokerages offer commission-free ETF trading, so check with your provider.
CASH.TO vs. Other Cash Investment Options
How does CASH.TO compare to other cash alternatives?
| Feature | CASH.TO | High-Interest Savings Account | Money Market ETF | GIC |
|---|---|---|---|---|
| Investment Focus | High-interest savings accounts | Deposits at a bank | Short-term debt securities (treasury bills, commercial paper) | Fixed-term deposits |
| Interest Rate | Competitive | Varies by bank and may be higher during promotional periods | Lower than CASH.TO | Higher but locked-in |
| Liquidity | High (buy/sell any time) | High | High | Low (locked-in for term duration) |
| Monthly Distributions | Yes | No | Yes | No |
| TFSA/RRSP Eligible | Yes | Yes | Yes | Yes |
| CDIC-Insured | No | Typically insured up to $100,000 | No | Up to $100,000 (if from a CDIC member bank) |
| Risk Level | Very Low | Very Low | Low | Very Low |
How It Compares to High-Interest Savings Accounts
HISAs are a direct alternative to CASH.TO, but they may not always offer the best rates. The advantage of CASH.TO is that it pools funds to secure higher interest rates from banks that may not be available to individuals.
However, accessing funds from CASH.TO requires selling shares on the TSX, which may take a couple of days to settle, whereas HISAs offer immediate access.
How It Compares to Money Market ETFs
Money market ETFs invest in short-term government and corporate debt, which carries a small amount of risk. CASH.TO, on the other hand, simply holds cash in high-interest savings accounts, making it even safer.
How It Compares to GICs
GICs generally offer higher interest rates, but your money is locked in for a fixed term (e.g., 1 year, 3 years, etc.). Accessing funds before maturity may result in penalties. On the other hand, CASH.TO provides more flexibility, allowing you to sell shares at any time without penalties.
How to Buy CASH.TO
Buying CASH.TO is as easy as purchasing any other stock or ETF. Here’s how to do it:
- Open a Brokerage Account – If you don’t have one, platforms like Questrade, Wealthsimple Trade, or TD Direct Investing allow you to trade ETFs.
- Search for the Ticker – Enter CASH.TO in your brokerage’s search bar.
- Decide How Much to Invest – Determine how much cash you want to park in this ETF.
- Place an Order – Choose a market order (buys at the current price) or a limit order (sets a price you’re willing to pay).
- Hold and Earn Interest – Once purchased, you’ll start receiving monthly distributions.
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Is CASH.TO Right for You?
CASH.TO can be a great option for:
✅ Short-Term Savings Goals – Saving for a vacation or home down payment? CASH.TO offers a higher return than a traditional savings account while keeping your funds accessible.
✅ Emergency Fund Parking – Need a place to park your emergency fund? CASH.TO provides liquidity and competitive interest rates, making it a better alternative to most savings accounts.
✅ Waiting to Invest – Holding cash while waiting for the right market opportunity? CASH.TO ensures your money earns interest instead of sitting idle.
✅ Earning Monthly Passive Income – With monthly distributions, CASH.TO is a great choice for those looking to generate regular passive income.
✅ Risk-Averse Investors – Prefer to keep cash in a registered account (TFSA, RRSP) while earning interest? CASH.TO offers a low-risk solution.
However, CASH.TO may not be the best option if:
❌ You Need CDIC Protection – If having your funds insured by the Canada Deposit Insurance Corporation (CDIC) is non-negotiable, a traditional high-interest savings account or a GIC might be a safer choice.
❌ You Want Long-Term Growth – While CASH.TO provides a solid return on cash, it does not offer the long-term growth potential of equities or other higher-risk investments.
Why CASH.TO Works for Me
I use CASH.TO as a way to make my idle cash work for me. Each month, I transfer money from my chequing account to my Questrade investment accounts. While waiting for the right investment opportunities or converting funds into USD to buy U.S. stocks, I want my cash to earn interest instead of sitting idle.
That’s why I gradually invest in CASH.TO—typically around $3,000 per month. Plus, with Questrade’s commission-free ETF purchases, I can buy it without any extra fees.
Real-Life Scenarios: When CASH.TO Makes Sense
Sometimes, financial decisions are best understood through real-life situations. Here are a few examples where CASH.TO could be a smart choice:
1. Saving for a Down Payment
Jimmy and Tiffany are planning to buy their first home in 18 months. They’ve saved $60,000 but don’t want to lock their money into a GIC in case the right property comes along sooner. By investing in CASH.TO, they earn a competitive monthly return while keeping their funds accessible if they need to make a quick down payment.
2. Emergency Fund
Helen is a freelancer with variable income. She wants her $20,000 emergency fund to stay liquid while still earning some interest. Traditional savings accounts offer her only 1.5%, but CASH.TO provides a 2.69% annualized yield. This way, her emergency fund grows steadily without sacrificing accessibility.
3. Waiting for Investment Opportunities
Lynn recently sold some investments and is waiting for a market correction before reinvesting. Rather than leaving her $40,000 in a basic brokerage cash account, she puts it in CASH.TO. This allows her cash to generate returns while staying ready to pounce on new investment opportunities.
Frequently Asked Questions About CASH.TO
1. Is CASH.TO Safe?
While CASH.TO is considered low-risk due to its focus on bank deposits, it is not CDIC-insured. However, the ETF diversifies across major Canadian banks, which helps mitigate risk.
2. Can I Hold CASH.TO in My TFSA or RRSP?
Yes! You can hold CASH.TO in registered accounts like TFSAs, RRSPs, and even FHSAs. This can be particularly useful since the interest earned is fully taxable in a non-registered account.
3. How Do I Get Paid?
CASH.TO pays monthly distributions directly into your brokerage account. These payments reflect the interest earned from the underlying bank deposits.
4. Is There a Minimum Investment?
No, there is no official minimum investment. You can buy as little as one share of CASH.TO through your brokerage account.
Alternatives to CASH.TO
While CASH.TO is a popular choice for earning interest on cash, other high-interest ETFs and cash management products also exist:
- PSA.TO (Purpose High-Interest Savings ETF): Similar structure with comparable yields.
- HSAV.TO (Horizons High-Interest Savings ETF): Offers competitive returns but does not pay out distributions—returns are reflected in the price.
- Bank High-Interest Savings Accounts: Ideal if you prefer CDIC insurance, but often offer lower rates.
Final Thoughts: Is CASH.TO Worth It?
CASH.TO is a practical solution for Canadians looking to earn interest on idle cash without sacrificing liquidity. Whether you’re saving for a big purchase, waiting for the right investment opportunity, or simply want an easy way to earn passive income, this ETF can be a solid addition to your portfolio.
As always, consider your personal financial goals and tax situation before investing. While CASH.TO offers many benefits, it’s important to ensure it aligns with your needs.
Would you consider adding CASH.TO to your portfolio? Let me know in the comments below!
