Are GICs good investments in Canada?
Guaranteed Investment Certificates (GICs) are a popular investment option in Canada known for their safety and predictable returns. Whether GICs are a good investment for you depends on your financial goals, risk tolerance, and investment timeframe.
Benefits of GICs:
- low-risk investments because they guarantee the return of your principal investment (the initial amount you deposit) at maturity, regardless of market fluctuations.
- predictable interest rates for a specified term (e.g., 1 year, 3 years), which allows you to know exactly how much you will earn by the end of the term.
- they are typically insured by the Canada Deposit Insurance Corporation (CDIC) or provincial deposit insurance programs, providing protection against institutional failure up to certain limits.
- GICs come in various terms ranging from short-term (e.g., 30 days) to long-term (e.g., 5 years), allowing you to choose a term that aligns with your investment horizon.
You can also place free funds on a savings account.
Calculate your future income on a savings account (example):
| Amount, $ | Rate, % | Accrued %, $ |
| 25,000 | 3.05% | 763 |
| 25,000 | 3.15% | 788 |
| 25,000 | 3.25% | 813 |
| 60,000 | 3.55% | 2,130 |
| 60,000 | 3.65% | 2,190 |
| 60,000 | 3.75% | 2,250 |
| 140,000 | 4.05% | 5,670 |
| 140,000 | 4.15% | 5,810 |
| 140,000 | 4.25% | 5,950 |
| 340,000 | 4.55% | 15,470 |
| 340,000 | 4.65% | 15,810 |
| 340,000 | 4.75% | 16,150 |
What types of GICs are offered by Canadian financial organizations?
- Fixed-Term GIC: a GIC with a specific maturity date and fixed interest rate.
- Redeemable GIC: allows early redemption before maturity, often with penalties or reduced interest.
- Cashable GIC: allows partial or full withdrawal without penalty after a specific period.
You can see the similar FAQ about Canadian banks at the link:
- Advice direct from BMO
- Alterna Bank RRSP
- Alterna Bank TFSA transfer fee
- Alterna Bank and the CDIC
- Alterna’s MarketTracer Term Deposit
Details of companies offering the financial services:
Bank Of Montreal
Head office’s address: 119, rue Saint-Jacques Montreal, Quebec H2Y 1L6
Contact center: 877-225-5266
Phone: 416-867-5000
Web-site: http://www.bmo.com/main/personal
Swift code: BOFMCAM2
Stock code: BMO
BSB: 001
CIBC
Head office’s address: 199 Bay St, 44th Floor Toronto
Contact center: 800-465-2422
Web-site: https://www.cibc.com/en/personal-banking.html
Swift code: CIBCCATT
Stock code: CM
BSB: 010
RBC Royal Bank
Head office’s address: 200 Bay St, 9th Floor South Tower, Toronto
Contact center: 800-769-2511
Web-site: http://www.rbc.com/canada.html
Swift code: ROYCCAT2
Stock code: RY
BSB: 003
TD Bank
Head office’s address: Toronto-Dominion Centre, Po Box 1 Stn Toronto Dom, Toronto
Contact center: 866-222-3456
Web-site: https://www.td.com/about-tdbfg/our-business/index.jsp
Swift code: TDOMCATTTOR
Stock code: TD
BSB: 004
TD Bank
Head office’s address: Toronto-Dominion Centre, Po Box 1 Stn Toronto Dom, Toronto
Contact center: 866-222-3456
Web-site: https://www.td.com/about-tdbfg/our-business/index.jsp
Swift code: TDOMCATTTOR
Stock code: TD
BSB: 004