DEFINITION of 'Bullet GIC'

A type of guaranteed investment contract where a single payment is made to the account and where both the principal and interest are returned to the payor at some date in the future. A bullet GIC, or bullet guaranteed investment contract (BGIC), provides investors with a typically low-risk means of achieving a guaranteed principal repayment, plus interest. These contracts are often offered by insurance companies.

BREAKING DOWN 'Bullet GIC'

With a guaranteed investment contract, an insurance company accepts a particular amount of money and agrees to return the money, along with interest, at an agreed-upon date in the future, typically ranging between one and 15 years. The interest can be paid at regular intervals or held to the contract's maturity. Bullet GICs are typically designed to accept a single deposit (usually $100,000 or greater) for a particular time period (generally between three and seven years). Bullet GICs are often used in defined benefit plans because they are compatible with the timing of plan contributions.

RELATED TERMS
  1. Bullet Transaction

    A loan in which all principal is repaid when the loan matures ...
  2. Bullet Repayment

    A lump sum payment for the entire loan amount paid at maturity. ...
  3. Guaranteed Investment (Interest) ...

    A deposit investment security sold by Canadian banks and trust ...
  4. Window Guaranteed Investment Contract ...

    A type of investment plan where a series of payments are made ...
  5. Guaranteed Investment Contract ...

    Insurance contracts that guarantee the owner principal repayment ...
  6. Global Industry Classification ...

    A standardized classification system for equities developed jointly ...
Related Articles
  1. Investing

    GICS Vs. ICB: Competing Systems For Classifying Stocks

    Global Industry Classification Standards and the Industrial Classification Benchmark separate stocks into sectors.
  2. Trading

    The Difference Between Forwards and Futures

    Both forward and futures contracts allow investors to buy or sell an asset at a specific time and price.
  3. Retirement

    The Cost Of Variable Annuity Guarantees

    These products tempt investors with some impressive benefits - but they come at a price.
  4. Financial Advisor

    Build Your Own Annuity

    Here are some tips on the different types of annuities to have in your portfolio.
  5. Managing Wealth

    Real Estate Gets Its GICS

    A dedicated sector classification gives real estate securities the recognition they deserve.
  6. Insurance

    Does Buying a Guaranteed Life Insurance Policy Make Sense?

    When does it make sense to buy a life insurance policy that is guaranteed?
  7. Financial Advisor

    Stable Value Funds: Risk Less And Earn More

    Stable value funds can provide higher yields and lower risk.
  8. Financial Advisor

    An Annuity Lowdown for Investors and Advisors

    Knowing how annuities work starts with an explanation of what each part is. Here is a list of terms that cover the basic aspects of annuities.
  9. Financial Advisor

    When Does It Make Sense to Buy an Annuity?

    Annuities are not always appropriate for every situation. Here is when it makes sense to purchase them.
RELATED FAQS
  1. How does a company obtain a bank guarantee?

    Find out how bank guarantees work, why they are issued and the process that a business normally goes through to acquire one ... Read Answer >>
  2. What is the difference between forward and futures contracts?

    Fundamentally, forward and futures contracts have the same function: both types of contracts allow people to buy or sell ... Read Answer >>
  3. How do the investment risks differ between options and futures?

    Learn what differences exist between futures and options contracts and how each can be used to hedge against investment risk ... Read Answer >>
  4. Why does the majority of my mortgage payment start out as interest and gradually ...

    When you make a mortgage payment, the amount paid is a combination of an interest charge and principal repayment. Over the ... Read Answer >>
  5. How can a futures trader exit a position prior to expiration?

    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in ... Read Answer >>
Hot Definitions
  1. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  2. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  3. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  4. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  5. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  6. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
Trading Center