GICs & Term Deposits
Guaranteed investments for short- and long-term savings
Guaranteed Investment Certificates (GICs) and term deposits can provide a predictable way to earn interest while preserving your principal.
They may be suitable for investors looking for greater stability, a defined investment term, and a known or predetermined rate of return.
Global Pacific provides access to competitive GIC and term-deposit rates from participating financial institutions through our deposit-broker relationships.
View Current Guaranteed Rates
What is a GIC?
A Guaranteed Investment Certificate (GIC) is a deposit investment issued by a financial institution for a specified period of time.
In return for keeping your money invested for the agreed term, the issuer pays interest according to the terms of the investment.
Depending on the product, interest may be:
Terms and features vary by issuer.
What is a term deposit?
The terms GIC and term deposit are often used to describe similar deposit investments, although terminology and product features can vary among financial institutions.
Term deposits may be available for shorter or longer periods and can include both redeemable and non-redeemable options.
Redeemable or cashable deposits
Certain deposits allow some or all of the investment to be withdrawn before maturity, subject to the product terms.
The trade-off for greater access to your money may be a lower interest rate.
Non-redeemable deposits
Non-redeemable GICs generally require funds to remain invested until maturity. In exchange, they may offer a higher rate than comparable redeemable products.
Your advisor can help you compare the available terms, rates and access-to-cash features.
Why consider GICs and term deposits?
GICs and term deposits can play several roles within a financial plan.
They may be useful when you are looking for:
Principal stability
Your principal is generally repayable at maturity by the issuing institution, subject to the terms of the investment and the issuer's obligations.
Predictable income
Fixed-rate GICs provide a known rate of interest for the applicable term.
Short- or medium-term savings
Different maturity dates can be selected to align with upcoming financial needs.
Portfolio diversification
Guaranteed investments can provide a more stable component alongside investments whose market values fluctuate.
Retirement income planning
GIC maturity dates can be coordinated with anticipated income needs.
Registered and non-registered investments
Depending on the financial institution and product selected, GICs and term deposits may be available within:
Non-registered accounts
Tax-Free Savings Accounts (TFSAs)
Registered Retirement Savings Plans (RRSPs)
Registered Retirement Income Funds (RRIFs)
Other eligible registered plans
Not every product or issuer is available for every account type.
Your advisor can help determine which options are available for your particular plan.
A GIC Laddering Strategy
Rather than investing all of your money for the same term, a GIC ladder divides the investment among several maturity dates.
This can provide regular access to portions of your money while reducing the need to predict where interest rates may be headed.
Example: A five-year GIC ladder
Suppose you have $100,000 to invest.
You could divide it into five equal portions:
| Investment | Initial Term |
|---|
| $20,000 | 1 year |
| $20,000 | 2 years |
| $20,000 | 3 years |
| $20,000 | 4 years |
| $20,000 | 5 years |
At the end of the first year, the one-year GIC matures.
If the funds are not required, they could then be reinvested into a new five-year GIC.
The same approach can be followed as each subsequent investment matures.
Once the ladder is established, approximately one-fifth of the portfolio matures each year.
Potential benefits of laddering
A GIC ladder may provide:
Regular maturity dates
Periodic access to part of your investment
The ability to reinvest at prevailing interest rates
Reduced reliance on choosing one interest rate or maturity date
Greater flexibility for cash-flow planning
Diversification across maturity dates
A laddering strategy does not guarantee a higher return. The appropriate structure will depend on your financial objectives, cash-flow needs and interest rates available at the time.
Access Competitive Rates Through Global Pacific
Global Pacific works with participating banks, trust companies, credit unions and other financial institutions to provide access to competitive GIC and term-deposit rates.
Rather than relying on the products and rates available from a single institution, your advisor can compare available options based on factors such as:
This can make it easier to select an investment that fits your objectives rather than choosing on interest rate alone.
Compare Current GIC & Deposit Rates
Rates are subject to change and availability.
Deposit protection
Eligible GICs and term deposits may be protected by a federal or provincial deposit-insurance program.
The amount and availability of deposit protection depend on factors including:
The issuing financial institution
Whether the institution is a member of the applicable deposit insurer
The type of deposit
The ownership and registration of the account
Applicable coverage categories and limits
Deposit-insurance rules differ between federal and provincial programs.
Your advisor can help you identify the issuer of a proposed investment and where to obtain information about the applicable deposit-protection coverage.
Choosing the Right Term
The highest available interest rate is not necessarily the most appropriate choice.
Before selecting a GIC or term deposit, consider:
When you may need access to the money
Whether the investment can be redeemed before maturity
The interest rate and how interest is paid
The maturity date
Your other investments and available cash
Whether the investment is registered or non-registered
Applicable deposit-protection coverage
A shorter term may provide greater flexibility, while a longer term may provide rate certainty for a longer period.
Your advisor can help you compare the trade-offs.
Looking for a GIC or Term Deposit?
Whether you are investing new savings, reinvesting a maturing GIC or building a laddered portfolio, your advisor can help you compare available rates, terms and issuers.
View Current Guaranteed Rates
Speak with Your Advisor
Don't have an advisor? Contact Global Pacific to connect with a licensed financial advisor.
Important Information
Interest rates, product availability and terms are subject to change without notice and vary by issuing financial institution, investment amount, term, account type and product selected.
Certain GICs or term deposits may not be redeemable before maturity. Where early redemption is available, restrictions, reduced interest or other conditions may apply.
Deposit-insurance protection is subject to the eligibility requirements, coverage categories and limits of the applicable federal or provincial deposit insurer. Investors should confirm the coverage applicable to their particular deposit and issuing institution.
The information provided is for general educational purposes only and should not be considered financial, investment, tax or legal advice. Please consult an appropriately qualified professional regarding your individual circumstances.
