Guaranteed Investment (Interest) Certificate - GIC

AAA

DEFINITION of 'Guaranteed Investment (Interest) Certificate - GIC'

A deposit investment security sold by Canadian banks and trust companies. They are often bought for retirement plans because they provide a low-risk fixed rate of return. The principal is at risk only if the bank defaults.

INVESTOPEDIA EXPLAINS 'Guaranteed Investment (Interest) Certificate - GIC'

The bank's profit is the difference between mortgage rates and GIC rates. If mortgages are at 8% and GICs are at 5%, then the bank makes 3%.

GICs offer a return that is slightly higher than T-bills.

RELATED TERMS
  1. Window Guaranteed Investment Contract

    A type of investment plan where a series of payments are made ...
  2. Bullet GIC

    A type of guaranteed investment contract where a single payment ...
  3. Term Deposit

    A deposit held at a financial institution that has a fixed term. ...
  4. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with ...
  5. Pre-Encashable Deposit

    A deposit made in a term deposit or CD that allows the account ...
  6. Stable Value Fund

    An investment vehicle found in both company retirement plans ...
RELATED FAQS
  1. How does a Registered Retirement Income Fund (RRIF) work?

    A Registered Retirement Income Fund is a tax-deferred savings plan in Canada, and it is the most common retirement income ... Read Full Answer >>
Related Articles
  1. Retirement

    CDIC Protects Canadians From Bank Failure

    Bank failures can happen in Canada, but many deposits are insured. Find out what's covered.
  2. Retirement

    The Money Market

    If your investments in the stock market are keeping you from sleeping at night, it's time to learn about the safer alternatives in the money market.
  3. Home & Auto

    Canadians: The 5 Fastest Ways To Save For A Down Payment

    Some methods of saving for a down payment are faster than others. Here are five tried and true ways to get into a house faster.

You May Also Like

Hot Definitions
  1. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  2. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  3. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
  4. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial figures. A company's trailing 12 months is a representation ...
  5. Subordinated Debt

    A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known ...
  6. International Financial Reporting Standards - IFRS

    A set of international accounting standards stating how particular types of transactions and other events should be reported ...
Trading Center