A GIC is a Guaranteed Investment Certificate, which means that you will lend some funds to a financial institution, and that you are guaranteed to get your investment back, as well as a certain interest rate. Before you start searching for the best GIC rates, you should learn more about why everyone should get a GIC.
1. A GIC is a safe investment
Unlike stocks, GICs are seen as a safe and secure investment. When you invest some of your money in a GIC, you are sure to get your investment back, along with some interests. Many people choose to get a GIC because they know their money will be safe.
2. You will never have to worry about losing money
When you invest some money in a GIC, whether it’s $500 or $2,000, you can be sure that you will get it back. You will most likely get a lower rate than if you were buying stocks, but at least there will be no risk of losing your money.
3. Different types of GICs are available
When you choose to get a GIC, you have many options. You can choose to lock your money in for only 1 year, or for 10 years. You can choose a non-redeemable GIC with higher GIC rates, or a redeemable GIC that will allow you to withdraw your money if you need to.
4. You might be able to take your money out at all times
If you choose a redeemable GIC, you will be able to withdraw your money before the term is over if you need to, and your financial institution might only reduce your interest rates. This option might be interesting for some people.
5. GIC rates vary depending on the bank and the term you choose
GIC rates depend on the financial institution you choose, and on the period of time you choose to lock your money in. Many smaller financial institutions can offer you higher GIC rates than big banks, so be sure to shop around.
6. GIC rates don’t fluctuate
Once you have chosen your GIC, you will know that your interest rates will not fluctuate until your term is over. If your interest rate is 2.15% for 1 year, you are sure to receive 2.15% of your investment after 1 year.
7. You will have a better rate than with a regular savings account
When you choose to invest some money in a GIC, you will enjoy better interest rates than if you simply keep this money in a regular savings account. A GIC is perfect for you if you want to reach a small financial goal quickly.
8. GICs are easy to understand
Since GIC rates don’t fluctuate and since there are no risks, GICs are easier to understand than other forms of investment. All you have to do is choose a GIC that meets your needs, decide how much money you want to invest, and then wait for the term to be over.