Meridian GIC Review

If you’re looking for a low-risk investment strategy that offers a guaranteed return on principal, then a Meridian GIC could be a good fit for you. Meridian offers various types of GICs, with tailored products designed to increase your wealth and protect against losses. The best part is that any money you put into your account will be given back at the end of your term, with automatic insurance on any deposit up to $250,000.

What is a Meridian GIC and why should I consider one?

A Meridian Guaranteed Investment Certificate (or GIC for short) is a low-risk investment product that offers a guaranteed return on your principal. The main draw of this type of product is that you can earn a fixed return on your investment or “play the market” without losing any of your principal. For this reason, Meridian GICs can be a safe haven for more conservative investors who don’t want to be exposed to the possibility of losing cash due to market fluctuations.

Types of Meridian GICs

Meridian offers many different types of GICs. Most require a minimum investment of $100 and can be incorporated into government-registered plans.

Cashable GICs

Meridian’s cashable GICs let you take your money out at any point without incurring a fee or penalty. They have a one-year term with a fixed interest rate at maturity. The downside is that any interest you earn will be lower if you cash your GIC out before your term ends. You also won’t earn any interest on GICs cashed out in the first 90 days.

Non-redeemable GICs

The terms for redemption on Meridian’s non-redeemable GICs are often quite strict, meaning you won’t be able to withdraw funds until your investment matures. If you do need to take out money early, you’ll usually have to pay a fee or penalty. These GICs have flexible terms up to five years and can offer higher interest rates than cashable GICs.

Fixed-rate GICs

Meridian’s fixed-rate GICs provide a predictable and reliable return on interest. This means that no matter what the stock market is doing, you’ll take home a set rate that won’t fluctuate based on market conditions. They come with terms between 30 days and 5 years and offer high interest rates.

Index-linked GICs

Index-linked (or market-linked) GICs give you fluctuating interest rates tied to the performance of a specific index in the stock market. Meridian currently offers five variable-rate products linked to the performance of companies in specific geographies and sectors. These types of GICs carry more risk since you can’t predict how much interest (if any!) you’ll get back, but they also offer the potential for higher returns.

Escalator GICs

Meridian offers a hybrid fund called an Escalator GIC, which offers a fixed rate of return over a flexible term. The rates increase each year so you can make more money the longer your funds are invested. But you also have the flexibility to withdraw your funds on an annual basis. These GICs come with three- and five-year terms and are only offered as registered investments.

Laddered GICs

If you don’t want to lock all of your money away over the long-term, you can also invest in one of Meridian’s laddered GICs to maximize your return. For this, you’ll need to divide the total amount you want to invest by five. Then you take the smaller amounts and invest them into five different GIC terms (maturing at one, two, three, four and five years). When each term matures, you can either re-invest the money or cash it in.

The benefits of investing with Meridian

Low-risk products

All of Meridian’s GIC products promise a guaranteed return on your principal investment. This means you won’t lose any of the money you put in due to fluctuations in the stock market. For this reason, you can use these investments to balance out risk in your investment portfolio.

Many different terms

You can lock your money away for as little as 30 days if you’re only looking to make a short-term investment. If you want a higher return on investment, you should put your money in for longer (with terms lasting up to five years).

Low minimum investment

You’ll be able to open a GIC with as little as $100 to get started. This is lower than many other GIC providers, who ask for a minimum investment of $500 or more.

Deposits are insured

Any money you put into your GIC (up to $250,000) is insured through the Deposit Insurance Corporation of Ontario (DICO). This means you’ll be protected if Meridian has to file for bankruptcy or can’t pay back your money for any reason.

Easy access to customer service

Meridian provides customer service through many different channels, so you can troubleshoot any issues you might have quickly and efficiently. You can also manage your investments over the phone, online and in-person (provided you live close to a branch).

How to apply for a Meridian GIC

If you’ve compared a number of GIC providers and have decided to apply for a Meridian GIC, you can do so online in a matter of minutes. Before you apply, make sure you meet the eligibility requirements and have all the relevant documents on hand.

Eligibility requirements

To apply for a Meridian GIC, you will need to meet the following criteria:

• Be a Canadian citizen or permanent resident who is at least 18 years old (19 in some provinces)
• Be a member of Meridian Credit Union (it takes five minutes to register as a member)

You will also need to provide the following documents and information:

• Your name, residential status and contact information
• Your social insurance number and date of birth
• Your email address and phone number

How can I buy a Meridian GIC?

It’s easy to buy a GIC directly from Meridian by applying online. You can also use the table above to get a better idea of the terms and rates on offer for several products. If you find a rate you like, you can click through to Meridian’s website to register as a member. Just remember that most GICs require a minimum investment of $100.

Bottom line

Meridian offers a number of GICs with flexible terms and competitive rates. You can learn more about these products by speaking to a Meridian advisor or by clicking through to their website on the table above.

Frequently asked questions about Meridian GICs

• Do I need to be a member of Meridian to invest in a GIC?

  Yes. But you can apply to be a member in less than five minutes by providing some basic personal information. You’ll then be issued with a bank card and further instructions on how to invest in your GIC.

• How often will interest be added to my GIC?

  You should be able to choose how often you want your interest compounded when you purchase your GIC. For example, if your interest is compounded bi-annually, it will be added to your initial investment twice per year.

• What happens when the term for my GIC ends?

  Once your term is up, you will be able to “cash out” your GIC and transfer the money to your bank account. You may also be able to roll your money over into a new GIC to continue earning interest.

• What happens if I take my money out before the GIC matures?

  Unless your GIC is cashable, you will likely need to pay a penalty to take money out before your term is up. You also risk losing the interest you accumulated on your investment, depending on the product.

• Can I get a better rate if I invest my money for longer?

  You can typically get a higher return on interest if you put your money in for several years. That being said, some of Meridian’s short-term GICs offer similar rates to GICs with terms of 3, 5 and even 10 years or more.

• Do I have to pay tax on my Meridian GIC?

  It depends on whether you choose a registered or non-registered product. If your GIC is held in a registered account like a TFSA, RRSP or RESP, then you won’t have to pay tax on any interest earned from your GIC. If not, you’ll have to declare the interest when you file your taxes.

• I'm not a Canadian resident, can I still open a GIC?

  No. Meridian requires you to live in Canada and supply a Canadian address in order to open a GIC.

• Can I apply online?

  Yes, you can apply online. Just go to the Meridian website and apply for the GIC you’re interested in.