It’s wise for you to want to develop Canadian investment strategies like GIC that earn you a positive return that you can use for your future. A guaranteed investment certificate is something that might be highly lucrative for you and provide you with the funds you desire. Here’s some information about what it is, how it works and why it can benefit you.
What Is a GIC?
GIC is an acronym for guaranteed investment certificate. It’s a fixed-income investment. In layman’s terms, it’s like a loan that you give to the bank in exchange for a specific return at the end of the term. The term can be anywhere from one month to several years. You deposit funds into an account for a predetermined time period, and then you receive what the bank offers. The GIC has a fitting name because it comes with quite a few guarantees. One guarantee is that you will get back what you put into it plus the interest that is agreed upon a purchase.
Who Qualifies for a GIC?
To qualify for a guaranteed investment certificate, you must be at least 18 years of age. You must also meet the minimum deposit requirements of whom you are considering doing business. One company may have a minimum of $1,000 while another may have a minimum of $5,000 or more. A trusted financial advisor will know which companies can service your needs the best.
Your Financial Investment Advisor Can Explain How it Works
The guaranteed investment certificate is pretty straightforward, and it works as many other investment accounts work. You deposit the funds into the investment account for the term that you settled upon with the bank. The bank returns the whole of your investment plus the fixed interest amount at the end of the term. They are very straightforward and predictable transactions.
A GIC might be right for you if you favor low-risk investments. One of the things that Canadian citizens love the most about GICs is that they can count on getting their returns as long as they abide by the rules. The only thing that could affect the investment is if the bank goes under. However, the Canadian Deposit Insurance Corporation protects the funds for up to $100,000. You can stay within that range if you want to have the highest level of security.
Now you have a little bit of information about guaranteed investment certificates. Your next step is to schedule an appointment with a seasoned financial investment advisor for additional information and some guidance on how to make your next move.
19 important questions to ask your financial advisor before considering taking them on as your financial consultant