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Types of GICs

Understanding the different types of Guaranteed Investment Certificates

What are the types of GICs?

There are two kinds of GICs: 1. GICs that become liquid after a period of time (cashable) 2. GICs that offer no liquidity until maturity (fixed) An investor can access the full principal and accrued interest of a cashable GIC at any time after the cashable period, typically 30 or 90 days. Investors can usually improve their returns through fixed term GICs, which offer no liquidity until maturity.

What is the difference between a cashable and a fixed GIC?

There are two kinds of GICs: GICs that become liquid after a period of time (cashable), and GICs that offer no liquidity until maturity (fixed). An investor can access the full principal and accrued interest of a cashable GIC at any time after the cashable period, typically 30 or 90 days. Investors can usually improve their returns through fixed term GICs, which offer no liquidity until maturity.

What is a market-linked GIC?

Some issuers offer "Market-Linked" GICs, which don't offer a fixed rate of return. Rather, the rate of return is pegged to the performance of a given index, commodity, or security. Market-Linked GICs still provide a 100% principal guarantee.