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.

BREAKING DOWN '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. Protected Fund

    A type of mutual fund that guarantees an investor at least the ...
  2. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific ...
  3. Capital Guarantee Fund

    A capital guarantee fund is an investment in which the investor's ...
  4. Guaranteed Income Bond (GIB)

    A guaranteed income bond (GIB) is an investment tool that provides ...
  5. Financial Guarantee

    An non-cancellable indemnity bond that is backed by an insurer ...
  6. Guaranteed Investment Contract ...

    Insurance contracts that guarantee the owner principal repayment ...
Related Articles
  1. Investing

    How to Sell Mutual Funds to Your Clients

    Learn about the various talking points you should cover when discussing mutual funds with clients and how explaining their benefits can help you close the sale.
  2. Financial Advisor

    When Are Mutual Funds Right for Your Client?

    Find out what factors determine whether mutual funds are right for your client, including risk tolerance, investment goals and tax implications.
  3. Financial Advisor

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  4. Investing

    Segregated Funds: Investment Protection For Canadian Citizens

    These funds contain the best of all worlds, providing opportunities for market growth with a no-loss guarantee.
  5. Insurance

    Does Buying a Guaranteed Life Insurance Policy Make Sense?

    When does it make sense to buy a life insurance policy that is guaranteed?
  6. Financial Advisor

    How to Transition Your Client Into Retirement

    The first step into retirement is a big one. Here are tips on how to help your clients transition from earning to drawdown.
  7. Financial Advisor

    Stable Value Funds: Risk Less And Earn More

    Stable value funds can provide higher yields and lower risk.
  8. Managing Wealth

    Should Balanced Funds Be Part Of Your Portfolio?

    Find out why you should include balanced funds in your portfolio, including the importance of customizability, diversification and professional management.
  9. Investing

    Satisfy Your Investment Objectives With Income Funds

    Discover the various categories of income funds and the types of investors for whom they are appropriate.
  10. Investing

    VTIBX, DFGBX, PIGLX, TPINX, ANAGX: Top 5 Global Bond Funds

    Learn about the top global bond funds for 2016. See how funds with longer maturities and duration have greater exposure to interest rate risk.
RELATED FAQS
  1. What is the difference between a bank guarantee and a bond?

    Understand the differences between a bank guarantee and a bond, including which one is a debt instrument. Read Answer >>
Hot Definitions
  1. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  2. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component ...
  3. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  4. Capital Asset Pricing Model - CAPM

    A model that describes the relationship between risk and expected return and that is used in the pricing of risky securities. ...
  5. Internal Rate Of Return - IRR

    A metric used in capital budgeting measuring the profitability of potential investments.
  6. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
Trading Center