What is a Guaranteed Investment Certificate (GIC)? A Guaranteed Investment Certificate (GIC) is an investment that you make for a specific amount of time. In exchange for your investment the financial institution agrees to pay you the full amount of your initial investment plus the interest. The amount of interest you earn depends on how much you invest, the features of the GIC, and how long you plan to hold the GIC before getting back your money. GICs are available for all of your registered and non-registered investments. They are safe and secure investments that have very little risk. There are several types of GICs:

  • Non-redeemable GICs are also referred to as Traditional GICs. The money is locked down until maturity. They can be short-term GICs or long-term GICs and return the principal plus interest at a specified rate
  • Redeemable GICs are also referred to as Cashable or Flexible GICs and typically have a lower interest rate than non-redeemable GICs. They return a guaranteed interest rate to maturity unless the issuer exercises the right to liquidate the contract. Even though they are redeemable most have a minimum length of time when they cannot be cashed out without penalty
  • Escalator Rate GICs increase each year of the term, regardless of the market rate’s fluctuation
  • Market-linked or index-linked GICs are based on the performance of various stock market indices.

What are the benefits of GICs?

  • They are affordable
  • You can choose the term of your GIC
  • They are safe and secure investments with very little risk
  • As a short-term investment you may get a higher return than with a bank account
  • They are guaranteed to $100,000