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GIC Canada Rates – Market Linked with Fixed, Variable rates.


GIC or General Investment Certificate is a low risk investment option. The returns on the investment depend on the time period for which the money is invested and also on the prevailing rate of interest.

There are three options available in GIC – fixed rate, variable rate, and market linked. The fixed rate GIC helps you to earn fixed interest on your investment and is ideal for you if you are reluctant to take risk. This interest rate depends on the time frame for which you want to invest. For example, if you want to invest for one year, you will earn around one percent on your principal amount, but if you invest for five years, you may earn around 6 percent on the principal.

Fixed rate GIC is further divided in to various types like redeemable GIC, non-redeemable GIC, and so forth. Redeemable GIC allows you to withdraw money before maturity date but it is not so in the case of non-redeemable GIC. Therefore, the interest rate of the former is less than the latter. There are many other products available in fixed rate GIC. They vary across banks like some banks increase the interest rate after the expiry of every year of investment while some give you bonus on your investments, and so forth. The GIC Canada Rates may vary every day. The rates of different banks also vary a little. Therefore, one should compare the GIC Canada Rates before making the final decision to invest.

If you do not want to lock-in your investment at the present rate of interest for a long time, you could opt for a variable rate GIC. In this type of GIC, the interest rates vary according to the Canadian prime interest rates. The main benefit of this investment option is that it helps you get your principal back. Besides you earn interest according to the prevailing rates. In most types of variable interest GIC, you can withdraw money after the expiry of 30 days. Some GIC products offer simple interest while some compound interest. In this type of investment, you will earn variable returns and your principal is 100 percent safe. The only drawback is that you do not know the rate of return you will earn.

If you are one who wants greater returns than fixed and variable rate GIC from your investments, you could opt for market linked GIC. Here, your returns would be linked to the stock market returns. If stock market performs well, you get superior returns but if it is not so, you may even get zero returns on your investments. However, the only thing that makes market linked GIC safer than direct investments in stocks is that your principal will be safe. This limits your risk to only the returns. Irrespective of the performance of stock market, you will get the principal back.

There are many benefits of investing in GIC like it helps you to get returns without risking your principal. However, since there are so many GIC types available, you must be thinking which one would be best for you. You could decide this keeping several things in mind.

  1. Amount of money you want to invest. This could affect the rate of return on your investment.
  2. Time period for which you want to invest. This will help you to decide the GIC type that will fetch best returns during that time period.
  3. Since interest rates vary across banks, compare the rates offered by several banks in order to get the best deal.
  4. Decide how much risk you can afford to take. If you are not ready to take any risk, opt for fixed rate, otherwise think about variable or market linked rates.

If you cannot decide the best GIC for you, contact an investment professional who could help you. These professionals check the entire financial situation of a person like – his investment portfolio – where a person has allocated his investments, his income, his debts and other financial liabilities. Keeping all these things in mind, the professional will help you to decide the best GIC for you and also help you to get the best GIC Canada Rates. Even a small difference of 0.25 percent returns can make a big difference over a long period of time. Hence, doing comparison-shopping is best before you invest in GIC.

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