“Do not save what is left after spending; instead spend what is left after saving.” ― Warren Buffett

A GIC is an investment that works like a special kind of deposit. When you buy a GIC, you are agreeing to lend the bank or financial institution your money for a set number of months or years (the term). You are guaranteed to get the amount you deposited back at the end of the term. For this reason, GICs are one of the safest ways to invest.

Is there a minimum amount you can invest in GIC’s? The minimum amount you can invest is typically $500.

Are there fees when you buy a GIC? No.

How is interest earned on a GIC? Most GICs pay a fixed rate of interest for a set term, such as 6 months, 1 year, 2 years or up to 10 years. The term ends on the maturity date. Some GICs offer variable interest rates, based on the performance of a benchmark such as a stock exchange index. In general, the longer the term, the higher the interest rate you will earn.

When do GIC’s pay interest? You may get paid interest on your GIC monthly, every 3 months, every 6 months, once a year or only on the maturity date.

Can you ever cash out of a GIC early? With some GICs, if you need to get your money back sooner, you will have to pay a penalty. Other GICs — called cashable or redeemable GICs — allow you to get your money back at any time with no penalty.

Is your money protected in a GIC?
 Your money is protected by the Canada Deposit Insurance Corporation (CDIC). This doesn’t apply to U.S. dollar GICs or GICs with terms over 5 years.

Can you hold GICs in registered investment accounts? Yes, for example, in RRSPs, RRIFs and TFSAs.