DEFINITION of 'Bank Investment Contract - BIC'

A security or portfolio of securities that offers a guaranteed rate of return. As the name implies, the guaranteed rate in a Bank Investment Contract is ensured by the bank for a predetermined length of time, usually one to 10 years. A bank investment contract (BIC) is typically a low-risk, low-yield investment suited to those looking to preserve rather than grow their wealth.


Sometimes called a bank deposit agreement.

BREAKING DOWN 'Bank Investment Contract - BIC'

BICs are similar to guaranteed investment contracts (GICs), which are issued by insurance companies. The primary disadvantage of all such contracts is that they are very illiquid, given that they generally require the money invested to stay put for the length of the contract. On the plus side, unlike certificates of deposit (CDs), BICs allow one to invest incrementally and when subsequent deposits are allowed, they receive the guaranteed rate as well.

RELATED TERMS
  1. Guaranteed Investment Fund (GIF)

    A guaranteed investment fund allows a client to invest in an ...
  2. Guaranteed Investment (Interest) ...

    A deposit investment security sold by Canadian banks and trust ...
  3. Bullet GIC

    A type of guaranteed investment contract where a single payment ...
  4. Leased Bank Guarantee

    A leased bank guarantee is a bank guarantee, which is leased ...
  5. Cash Contract

    A financial arrangement that requires delivery of a particular ...
  6. Contract Unit

    A Contract Unit is the actual amount of the underlying asset ...
Related Articles
  1. 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.
  2. Investing

    Low-Risk Investment Alternatives With Higher Returns

    With low interest rates hurting CD returns, you might want to consider these low-risk investments.
  3. 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.
  4. Personal Finance

    Retail Banking vs. Corporate Banking

    Retail banking is the visible face of banking to the general public. Corporate banking refers to the aspect of banking that deals with corporate customers.
  5. Financial Advisor

    Why Banks Don't Need Your Money to Make Loans

    Contrary to the story told in most economics textbooks, banks don't need your money to make loans, but they do want it to make those loans more profitable.
  6. Investing

    Should CDs Be a Thing of the Past?

    Certificate of deposit rates remain low. Are there better alternatives?
RELATED FAQS
  1. What's the difference between a bank guarantee and a letter of credit?

    Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction ... Read Answer >>
  2. 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 >>
  3. How safe an investment is a certificate of deposit?

    Discover certificates of deposit, their basic makeup and numerous variations, and understand why they are some of the safest ... Read Answer >>
  4. Are my investments insured?

    No. Whenever you invest in a stock, bond or mutual fund, there is no insurance against the possible loss of your initial ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  2. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  3. Risk Tolerance

    The degree of variability in investment returns that an individual is willing to withstand. Risk tolerance is an important ...
  4. Donchian Channels

    A moving average indicator developed by Richard Donchian. It plots the highest high and lowest low over the last period time ...
  5. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, ...
  6. Moving Average - MA

    A moving average (MA) is a widely used indicator in technical analysis that helps smooth out price action by filtering out ...
Trading Center