Open a GIC with EQ BankTo open a GIC with EQ Bank, you'll first need to open an EQ Bank Savings Plus Account.
Get a $150 signup bonus when you open an account and switch your eligible recurring payroll direct deposit to EQ. Apply by July 13, 2022.
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A GIC or guaranteed investment certificate guarantees a consistent return on interest and you won’t lose money on your original deposit. As interest rates climb, these locked-in investments become more attractive to Canadians. Our GIC guide explains the GIC pros and cons, the different types of GIC and how to get a GIC.
A guaranteed investment certificate (or GIC for short) is an investment vehicle that lets you earn an interest rate on your savings. In return, you usually have to lock your funds in over a fixed term that can last anywhere between 30 days and 5 years. When your term expires, you’ll get the interest you earned on your account plus the amount you originally deposited. This is usually paid out as a lump sum of cash that you can re-invest or put into savings.
There are many different types of GICs, and the best one for you will depend on your unique set of financial needs and savings goals. The main benefit of all GICs is that they are a relatively safe investment because you can’t lose the principal amount you invest. The main downside is that you won’t usually be able to access any money you put into your account until your term ends (unless you sign up for a cashable or redeemable GIC).
GICs are relatively low-risk investments that let you earn a higher interest rate than you might be able to with a normal savings account. Interest rates can be either fixed or variable, depending on your preferences. A fixed rate GIC will offer a consistent rate of interest for the duration of your investment. Variable rate GICs offer interest rates that fluctuate in line with market conditions.
For example, you might earn around $30 per year on a $1,000 investment with a fixed rate of 3%. As the amount you invest increases, this dollar figure will go up. With a variable interest rate GIC, your return will be more of a mixed bag. This is because you could earn a 4% return in one month and a 1% return in the next month, depending on what the market is doing.
GICs are only taxable if they are held in non-registered accounts. For example, if you hold your GIC in a regular savings account, you’ll have to pay taxes on any interest you earn. GICs are not taxable if they are held in a registered account such as a TFSA, RESP, RRSP or RRIF. This means you won’t need to claim the interest you earn on your taxes as income. Learn more about registered vs non-registered GICs.
Depending on the financial institution, there are several types of GICs with different terms and interest rates.
You’ll want to consider the following features when comparing GICs:
GICs come with a number of features that make them a worthwhile investment to pursue:
GICs also include a handful of drawbacks you should be aware of before investing:
GICs are a very safe investment vehicle and can even be used to help you lower the risk in your investment portfolio. Aside from giving you a guaranteed return on your original investment, GICs are automatically insured with either Canadian Deposit Insurance Corporation (CDIC) insurance or provincial insurance.
Both types of insurance limit coverage to a set term and amount. For example, CDIC insurance covers up to $100,000 over a 5-year term. The good news is that you don’t have to apply for or pay premiums to get this insurance, and you’ll get an automatic payout from the insurance agency if the bank closes or goes out of business.
You can buy a GIC through your bank or another financial institution, both in person or online. Keep in mind that most GICs require a minimum investment of $500 while others go as high as a $10,000 minimum.
GICs are designed for the cautious investor who wants to get a decent return on the money they put in. If you’re interested in a GIC, just be aware that any money you put in will be locked in for the duration of your term unless you sign up for a cashable or redeemable GIC.
Earn interest on your savings with a guaranteed investment certificate (GIC). Find out if owning a GIC is right for you.
Compare GICs and bonds to learn which investment is the best fit for your financial situation.
Learn the difference between a GIC and TFSA and find out which investment is the best fit for you.
Figure out whether you should invest in a registered or non-registered GIC and compare providers to find the best deal.
Compare GICs and mutual funds to find out which investment is the best fit for you.
Want a GIC designed with your small business in mind? Get a top return on investment with the Meridian 18 month non-redeemable GIC.
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