Guaranteed Investment Fund - GIF

AAA

DEFINITION of 'Guaranteed Investment Fund - GIF'

A type of investment product offered by insurance companies that allows its client to invest in an equity, bond and/or index fund while providing a promise that some predefined minimum value of the fund (usually, the initial investment amount) will be available at the fund's maturity or when the client dies. Insurance companies usually charge up to 1% of the investment amount per year for this service.

INVESTOPEDIA EXPLAINS 'Guaranteed Investment Fund - GIF'

Some guaranteed investment funds also give people the opportunity to "reset" the guaranteed amount during specific periods of time. This allows investors to lock in greater sums in the event that they incur a large capital gain.

For example, suppose an investor near retirement age had invested $500,000 into this fund and after a incredible bull run, his investment grows to $585,000 in a year. By resetting the guarantee at this point in time, the investor has now guaranteed that he will at the very least receive $585,000.

RELATED TERMS
  1. Index Fund

    A type of mutual fund with a portfolio constructed to match or ...
  2. Issuer

    A legal entity that develops, registers and sells securities ...
  3. Guaranteed Bond

    A debt security that offers a secondary guarantee that interest ...
  4. Guaranteed Minimum Accumulation ...

    A rider on a variable annuity, which guarantees the minimum amount ...
  5. Guaranteed Lifetime Withdrawal ...

    A rider on a variable annuity that allows minimum withdrawals ...
  6. Guaranteed Minimum Income Benefit ...

    A type of option that annuitants can purchase for their retirement ...
Related Articles
  1. Explaining Types Of Fixed Annuities
    Bonds & Fixed Income

    Explaining Types Of Fixed Annuities

  2. Getting the Whole Story on Variable ...
    Options & Futures

    Getting the Whole Story on Variable ...

  3. The Cost Of Variable Annuity Guarantees
    Retirement

    The Cost Of Variable Annuity Guarantees

  4. A Look At Single-Premium Life Insurance
    Home & Auto

    A Look At Single-Premium Life Insurance

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center