Guaranteed Investment (Interest) Certificate - GIC
What Does Guaranteed Investment (Interest) Certificate - GIC Mean?
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.
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