The next section of the Action Financial Group Orientation Series will deal with Investing and the various investment products or assets:
• Saving, banking, investing
• Cash and High Interest Savings Accounts (HISA)
• Guaranteed Investment Certificates (GIC)
• Bonds
• Stocks
• Mutual Funds
• Exchange Traded Funds (ETF)

Today we will deal with Guaranteed Investment Certificates (GICs).

A Guaranteed Investment Certificate (GIC) is an investment in which the investor deposits some funds with a financial institution for a fixed period of time usually ranging from 1 to 5 years.

The financial institution promises to pay a fixed rate of interest for the period of time the funds stay deposited. The interest can either be accumulated or “compounded” until the end date, or the interest can be paid annually. The end date is called the maturity date, at which time the originally invested amount is returned to the investor along with interest.

GIC interest and principal (the original amount invested) are guaranteed by the issuer, and backed by the Canadian Deposit Insurance Corporation, if the GIC meets certain requirements. Therefore, these investments have extremely low risk, and GIC interest rates are sometimes referred to as the “risk free rate” against which other investment returns are compared. A GIC cannot be cashed in or redeemed prior to its maturity date, unless it is invested as a “cashable” GIC. Therefore, an investor should be very aware of when they might need to use the funds, as they cannot be liquidated before maturity.

A GIC can be held in various account types that we described in earlier sections of this series: open, RRSP/RRIF, LIRA/LIF, TFSA, RDSP, RESP.

We hope you will find this information valuable and will increase your financial confidence. You can always find these articles on our website

Stay tuned for next week’s topic! In the next section we will deal with Bonds.

Karin Rimnyak, Certified Financial Planner®
Investment Advisor
Insurance Advisor, Action Financial Group Ltd.

David Dryburgh, Certified Financial Planner­®
Investment Advisor

Insurance Advisor, Action Financial Group Ltd.

Ian Barrie, Certified Financial Planner®
Investment Advisor

Insurance Advisor, Action Financial Group Ltd.

This information has been prepared by Karin Rimnyak who is an investment Advisor for iA Private Wealth. Opinions expressed in this email are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth. iA private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.