Window Guaranteed Investment Contract

AAA

DEFINITION of 'Window Guaranteed Investment Contract '

A type of investment plan where a series of payments are made to an insurance company, and the principal and interest rate are guaranteed by the insurance company to which payments are made.


Window guaranteed investment contracts are similar to certificates of deposit that are sold at banks. They are considered to be a very safe investment; however, because they involve little risk, they offer only small returns. Window guaranteed investment contracts, known as window GICs, differ from other GICs because they are bought with a series of payments over time instead of a lump sum.

INVESTOPEDIA EXPLAINS 'Window Guaranteed Investment Contract '

A window guaranteed investment contract is typically intended for 401(k) plans and defined contributions plans. A window GIC is also attractive to smaller businesses, new plan start-ups or companies that want a fixed and guaranteed rate throughout the year. The window is the period of time during which the company can make payments and receive the guaranteed interest rate. It should be noted that even though window GICs seem to be guaranteed, they are backed only by the insurance company that sells them, and not backed by the full faith and credit of the United States government like certificates of deposit are through the FDIC program. If the insurance company becomes insolvent, the investment could lose all of its value.

RELATED TERMS
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
  2. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  3. Institutional Investor

    A non-bank person or organization that trades securities in large ...
  4. Guaranteed Investment Contract ...

    Insurance contracts that guarantee the owner principal repayment ...
  5. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  6. Elder Law

    Elder law is a legal specialty focusing on the rights and needs ...
Related Articles
  1. Combining Your Plan Assets? Not So Fast!
    Retirement

    Combining Your Plan Assets? Not So Fast!

  2. The Investing Risk Of Underfunded Pension ...
    Retirement

    The Investing Risk Of Underfunded Pension ...

  3. How To Save More For Your Retirement
    Taxes

    How To Save More For Your Retirement

  4. Business Owners: A Guide To Qualified ...
    Entrepreneurship

    Business Owners: A Guide To Qualified ...

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