What Is a Guaranteed Investment Certificate?

Guaranteed Investment Certificates (GICs) are a kind of safe investment that can provide protection for investors' funds. When choosing a guaranteed investment certificate, the interest earned by an investor's investment will be calculated based on a fixed interest rate, a floating interest rate, or a market-linked formula. For many people, a guaranteed investment certificate (or other conservative fixed income investment) is a good option to protect your investment portfolio.

Guaranteed Investment Certificate

Guaranteed Investment Certificates (GICs) are a kind of safe investment that can provide protection for investors' funds. Choose a guaranteed investment certificate, the interest earned by the investor's investment will be based on

GICs allow investors to invest a sum of money in a specific period. Depending on the GIC that the investor chooses, at the end of this period, the guaranteed investment certificate will also "maturity", and the investor can use the investment and the interest earned. ^[1]

GIC is a popular investment option. Compared with other types of investment, it has the following specific benefits:

Safe and reliable : The investment principal is guaranteed.

Ensuring growth :

Guaranteed Return (or Fixed Interest Rate) Guaranteed Investment Certificate

(1) Irredeemable Guaranteed Investment Certificate and Redeemable Guaranteed Investment CertificateInvestors' investment amount and interest are protected.

(2) Building Block GIC The investor decides an amount and then periodically (weekly, bi-weekly, or monthly) contributes to the guaranteed investment certificate to keep the investment growing.

(3) Five-in-One GICThe investment money is divided into 5 equal parts, and each part has a maturity period ranging from 1 to 5 years, so that investors can have the opportunity to make investment choices every year. This strategy is called It is "laddering".

(4) Redeemable Guaranteed Investment Certificate for one year-After 30 days, such a Guaranteed Investment Certificate can be redeemed without penalty.

(5) Rate Advantage GICThe interest earned by investors increases every year. You can also invest in a cashable version, allowing investors to choose whether to redeem or not at each investment anniversary.

(6) US Dollar Term Deposits If you invest in US dollars, such secured investment certificates are not redeemable, but there are many options in terms of terms that suit investors' needs.

Interest-linked Guaranteed Investment Certificate

Redeemable Guaranteed Investment Certificate Linked to Best Rate This is a one-year guaranteed investment certificate that is linked to the best rate offered by Bank of Canada. By choosing such a secured investment certificate, investors can cash out after 30 days of investment without penalty.

Market-linked Guaranteed Investment Certificate

(1) Canadian Market-Linked GIC The interest earned by investors increases as the S & P / TSX 60 index rises.

(2) Global Market-Linked GIC The interest earned by investors increases as the weighted international stock market index rises.