The rate cut and the damage done to savers and investors holding cash. Plus, the $1.8-million TFSA

The Bank of Canada’s rate cut earlier this month has rippled through the universe of products for savers and, so far, the damage is minimal.

The overnight rate dropped 0.25 of a percentage point on June 5 and yields on some cash parking spots for investors have followed along. Example: Returns on investment savings accounts, which are savings products for investors that trade like a mutual fund, have declined to 4.25 to 4.5 per cent from 4.5 to 4.75 per cent. As always, there’s some variation between issuers. The BMO High Interest Savings Account offered 4.5 per cent as of late this week, compared to 4.

All of these rate changes help guide expectations for cash parking spots through the rest of the year. Any move by the Bank of Canada will weigh on returns. Four more cuts in the overnight rate this year would bring down rates on investment savings accounts to as little as 3.25 per cent, which reduces their attractiveness if you use them as anything other than a short-term hold.

GIC rates have slowly backed off since the Bank of Canada rate cut. You can still get 5 per cent returns for a one-year term from a half a dozen or so providers, and for two years from a few.This is the Globe Investor newsletter, published three times each week.

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