5 Investment Tips for the Best GIC Rates

A Guaranteed Investment Certificate (GIC) is a Canadian investment that will offer you a rate of return that you can count on for a given time period. As these investments are such low risk, many people overlook them for the more exciting and turbulent world of stocks and bonds. GICs should be given a second look as they can offer exactly the kind of investment that you’re looking for.

Here are 5 things that you need to know if you are looking to invest in GICs.

1. You need to do your research

When it comes to getting the best GIC rates for yourself, you should do as much research as possible to make sure that you get the best possible rate. At the moment, credit unions are offering very competitive rates as are the banks. Taking the time to do as much research as you can to find the best option for you can have a huge impact on the return that you will get off your GIC investment.

2. Understand the deposit insurance plan

As you do your research you should pay particular attention to the details around the deposit insurance plan. Not all opportunities for GIC investments are created equal and you will have to make sure that the deposit insurance plan covers you for what you need it to. If your GIC is not insured, you will likely have to sign a waiver acknowledging this.

3. Want the best possible rate? Talk to a broker

Deposit brokers will do a lot of the research that you need them to do in the same way as a mortgage broker. By using their contacts to reach out and find the best possible rate you will also be able to rely on them to help with the paperwork required. Another reason that you should consider the use of a deposit broker is that it will come at no cost to you. It is the GIC seller that provides the compensation. If you are asked to pay anything to the firm or broker, you should ask why as this is unusual.

4. They can get you the best rate, but they’re still salespeople

Yes, deposit brokers can get you the best rate, however, they are still salespeople and you need to make sure that you are dealing with a reputable firm. Starting with the individual that you are dealing with at the deposit broker, you should check online to see the reviews and any comments about them. Google is your friend here and if they are anything but 100% trustworthy, here is where you will find any red flags. Remember, it is your money and you should do your due diligence on the people who manage it.

5. Don’t overlook insurance company GICs

These are often called Guaranteed Interest Accounts (GIAs), they offer another great investment opportunity and have some great incentives for those who are currently estate planning. Therefore, they are more popular with the older generation. The advantage to GIAs is that they pay out directly to the beneficiary in the event of death without any penalty. This can make a huge difference those left behind.

Ultimately, as with any investment, you need to fully understand what a GIC is and who you are purchasing it from. Knowing as much as you can will protect you from any surprises in the future. Once you have found a firm that you trust to manage your money, you should not hesitate to make the most of the opportunities that you are presented with.

Kelly Young is a writer born and raised in Toronto. Proud of her simple and cozy life, a perfect evening for Kelly would be to snuggle up in bed with her cat and a well-written historic memoir.