Advantages of Guaranteed Investment Certificates
On top of the investor’s priorities is protecting its hard-earned savings. It is sad to note that a number of unfortunate events in recent years proved that inventors can lose their investments. As consequence, investors turn to huge and stable financial organizations such as great Canadian Banks to seek investment protection. Here comes Guaranteed Investment Certificates (GIC) that lives up to the challenge as a tool of protecting investments.
Guaranteed Investment Certificates
A Canadian investment group is offering a guaranteed return rate over a specific period of time that is similar to the ones issued by trust companies or banks. This group maintains a low risk profile that its returns are generally lower compared to less risky investments in bonds, mutual funds or stocks. GIC can be compared to a time deposit.
Two basic types of GICs
• Participating GIC
Investors are proactive: they receive varied return rates rate and they are literally emerged in the risky conditions and profits coming from fluctuating interest rates. If expected rise of interest rates in the future is plausible, investing in a participating GIC is better, so as to benefit from the expected rise in the interest rate.
• Nonparticipating GIC
They are offered a fixed rate of return without participating in the influx rate of the market. It’s sensible to buy a nonparticipating GIC when current rates of market interest are high. Or you can choose to have a high fixed rate of return for the life of the investment contract.
• Guaranteed Investment Certificates are secured investments.
These certificates guarantee 100% return of the original amount invested. Your investment earns interest, at either a fixed or a variable rate, or based on a pre-determined formula.
• Guaranteed Investment Certificates’ fixed rate of interest
GIC offers a fixed rate of interest for a specific term. Payments for both principal and interest are guaranteed.
• Security and safety
Back by the financial strength of banks, GICs are safe and secured; and are likewise backed by the financial strength of their organizations.
• Competitive interest rates
No reason to complain about Interest rates as they are competitive and guaranteed for the entire term of the investment
• Flexible investment terms
Investment terms are not fixed but flexible. It is ranging from 1 year to 5 years
• Choice of interest payment frequencies
Investors have the option to choose payment of interest. It could be monthly or annually
• Insured by Canada Deposit Insurance Corporation (CDIC).
One of the main benefits of Guaranteed Investment Certificates GICs is that they are, for the most part, insured by the Canada Deposit Insurance Corporation (CDIC). Be confident that your investment will yield profit on its maturity date at the same time, your investment is doubly protected.
Who can benefit from this solution?
People with extra money that are not immediately needed are wise to purchase Guaranteed Investment Certificates. They will enjoy the security of guaranteed interest rates. GIC is market-linked to a range of investment options taking advantage of the market potential. GIC also gives you peace of mind, as your investment is 100% principal protected at maturity. You can surmise with confidence that while GICs have been fluctuating over time, they appear nevertheless to have found a prominent place among benefits actively considered as one good retirement fund investment.