Guaranteed Investment Certificates (GICs)

What Are GICs?

Guaranteed investment certificates, or GICs, are low-risk investment options for a safe and secure investment. Having a balanced investment portfolio means having guaranteed returns as well as varying levels of riskier options.

A GIC works similar to a savings account in that you earn interest on money deposited. The difference, however, is that GICs have a guaranteed interest rate for a specified period of time. If you choose to withdraw any money before the maturity date, you may have to pay a penalty.

When you purchase a GIC, you make an agreement with the financial institution that you will keep your money held there for the specified time period, usually up to 5 years. In exchange, the money you invest will earn a guaranteed annual interest.

Typically, the longer the term, the more interest you will earn. At the end of the term, you will receive the full amount you initially deposited plus all interest earned.

You can hold GICs in registered investment accounts like RRSPs, RRIFs, and TFSAs. If your GIC is not held in one of these, you will be taxed on the interest you earn.

Ask your Scrivens advisor if GICs are right for you.