Understanding GICs

In Canada, a guaranteed investment certificate (GIC) is a deposit investment product sold by Canadian banks and trust companies. It’s considered to be a low-risk investment and offers a guaranteed rate of return over a fixed period, ranging from a few months to five years or more. In general, the longer the GIC term, the higher the interest rate, and non-cashable GICS in which your investment is locked-in tend to offer a higher interest rates than cashable GICS that allow you to withdraw your money before the term is up.

Your GIC is guaranteed by The Canadian Deposit Insurance Corporation (CDIC). The CDIC is a federal Crown corporation created by Parliament in 1967 to protect deposits (up to $100,000) made with member financial institutions in case of their failure (for more information go to cdic.ca). In addition, the Deposit Guarantee Corporation of Manitoba provides 100% guarantee of deposits held with Manitoba credit unions and caisses populaires. (for more information go to dgcm.ca). Finally, Assuris offers protection in the event that a life insurance company fails. Assuris is a not-for-profit corporation funded by the life insurance industry. It protects Canadian policyholders against loss of benefits due to the financial failure of a member company (for more information go to assuris.ca)