GIC (Guaranteed Investment Certificate)

A Guaranteed Investment Certificate (GIC) is a type of investment that guarantees a fixed rate of return over a specific period of time, known as the term. It’s a low-risk investment option.

GICs are offered by banks, credit unions, and other financial institutions. They typically have terms ranging from a few months to several years. The longer the term, the higher the interest rate is likely to be.

GICs are considered a safe investment because your principal is guaranteed, and the interest rate is fixed for the entire term. However, GICs may not offer the same potential for high returns as riskier investments, such as stocks or mutual funds.

Early withdrawal before the maturity date usually incurs a penalty.

• Related Terms: Investment, Fixed Income, Savings, Interest Rate, Term Deposit