What is a GIC?
What is the best 1-year GIC rate in Canada?: GIC is the acronym for Guaranteed Investment Certificate, in simple terms it is just like a normal savings account where you put money in your account and receive interest accordingly. GICs are a type of deposit investment that are common in Canada.
It is sold by Canadian banks and trust companies. These investment options vary in a period of investment, financial needs, etc. the buyers can opt for different GICs according to their suitable interests. It is a safe and low-risk investment.
Let us look at how the GICs work:
To invest in GICs you need to know that they must purchased within an account. A buyer/ client must then deposit their money in the bank, only after which the mentioned interest rates will gained.
The money deposited will be fixed in the account for a set period and the interest rates will be decided based on it. It is observed that the longer the investment is deposited, the higher the interest payments.
There are 3 factors that are important to know, to understand how much you will earn via the GICs
- The financial institution- the banks that you are investing in play a role. The GICs will differ from one bank to another.
- Time period- the longer the money nvested in the bank the higher interest rates you are likely to receive.
- The way in which the interest calculated-
One advantage of Guaranteed Investment Certificates (GIC) is that there a low risk associated with it because of the legal structures in Canada.
One advantage of Guaranteed Investment Certificates (GIC) is that there is a low risk associated with it because of the legal structures in Canada. The Banks are bound to pay you back, the Canadian Deposit Insurance Corporation (CDIC) also makes it a point that even if the bank fails/ suffers a shock, the buyer insured around 100000 Canadian dollars.
What is a Cashable GIC?
By purchasing cashable GICs, you as an investor will have the right to withdraw the deposit. However, there will an initial closed time when you cannot withdraw the money. In this case, the investor suffers less inconvenience of requiring paying a penalty fee.
For people who do not want to lock their money for way too long, Cashable GIC is the best solution for them.
The RBC (Royal Bank) in Canada has a good initiative for 1-year cashable GIC, this ensures good competitive returns on your investments without committed for a very long term.
The one-year cashable GIC offers a decent interest date with maximum flexibility for the investor’s convenience. You paid the right interest up to the date and it is cashable.
For further queries and doubts, you can visit One-Year Cashable GIC – RBC Royal Bank
What are the best interest rates for GIC in Canada?
TD Bank- 1.05 %
Meridian Credit Union- 2.00 %
Bridgewater Bank- 1.97 %
Oaken Financial – 2.15 %
All the above-mentioned banks provide 1-year term GIC interest rates. Students can also apply for this as it a short-term investment scheme designed for them.
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