GIC is one of the most popular forms of investments in Canada. The interest rate that it has contributed to its popularity, and it has provided many people with the opportunity to make good interest with their investments. You need to know that the interest rate is fixed. The change in the market conditions does not affect the interest rate. So at the end of the day, there is no risk involved, and you will get the money that was promised. In this article, we will see some of the interesting aspects of GIC.
A better option when compared to stock or bonds
We all know that investing in stock markets involves a lot of risks. We are not denying the fact that there are possibilities of getting huge returns in stocks and bonds. But every coin has its other side, it is a highly volatile market, and there are possibilities that you might not even get the amount that you have invested. You need to do a lot of research before investing, and a lot of parameters comes into play to decide the value of the stock. That is not the case when it comes to GIC, all you need to do is invest and wait for the maturity time to reap the benefits.
Factors that determine the GIC rate
There are a lot of factors that are taken into consideration to decide the Gic rates. Some of the factors that play a major role are the type of certificate, the duration of the plan that you are going to invest, and a lot more. The interest rate and the duration of the plan are directly proportional to each other. If the duration of the plan that you are investing in long, then the interest will be higher.
How does it work?
GIC – Guaranteed Investment Certificate works in a very simple way. For investing in GIC, you will have to deposit a particular amount for a specific period of time. There are different time periods from which you can choose from. Make sure that you are taking the right decisions so that the investment does not affect other expenses. There will be an interest rate according to which the investment will grow over a period of time. When the maturity time is over the investment along with the interest, can be withdrawn.
Options other than standard GIC
When it comes to making investments, it is always good to explore as much as possible. Other than the standard GIC, there are growth and stock indexed guaranteed certificate. There are good possibilities that the rates might change with these investments according to the stocks in the market. Unlike GIC, there are a lot of risks involved in it. You might make it big, or there are chances that you might hit rock bottom.