Guaranteed investment certificates (GICs) offer a safe investment opportunity. It has fewer risks and is considered a secure investment product. Over a certain period, you will be able to earn interest.

If you want to obtain the best interest rate, you should select a long-term. Depending on the term length, you may get a different interest rate.

Keep on reading to select the most suitable type of GIC and compare your options.

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Things You Should Know about GICs


Many Canadians want to learn more about GICs as this is a safe and guaranteed type of investment. Are you willing to understand how this investment works?

More and more people choose to set aside their finances to create a safety cushion for their future and make their money work for them. I

If you tend to live paycheck to paycheck and seek quick cash Nova Scotia when there are still a couple of weeks left until the next salary day, you should consider investing your funds and budgeting.

A guaranteed investment certificate (GIC) presents an investment product. It offers consumers a guaranteed rate of return for a particular period. The term length may be different depending on your preferences and the interest will differ.

You may choose a term of 30 days or 10 years. The higher interest you want to have, the longer you should invest your funds.

The annual percentage yield is defined when the funds are purchased. The APY can be paid annually, semi-annually, quarterly, or monthly.

Besides, the whole amount can be paid at maturity. Once the GIC’s term is finished, the individual gets the principal back together with the interest.

Is There a Difference between GICs and Term Deposits?

According to the Financial Consumer Agency of Canada, guaranteed investment certificates (GICs) and term deposits are just different names for similar products. These are common kinds of deposits a consumer makes with an institution for a certain period.

This financial institution may charge a fee or refuse in case a consumer wants to withdraw the funds before the end of this period.

How Can I Purchase a GIC?


Local banks and other financial institutions may offer you GICs. You should decide on the sum you would like to invest before you get in touch with a GIC provider. You may make a small investment of $100 or as big as $5,000.

The amount is different in each financial institution. After that, you need to compare rates. You can search for a fixed or a variable rate and decide what flexibility and accessibility you want for your money.

Once you’ve done the research and come up with the sum and the desired rate, you may contact the GIC issuer and begin the process.

You may apply:

  • By Phone/ Online. You will need to submit a request to prove your identity if you don’t have an account with a particular financial company. If you already have an account, you may contact the institutions over the phone or on the web. Those who are planning to open an account may need to provide their Social Insurance Number (SIN).
  • In-person. Another common way to start GIC is to visit their local branch. The same goes, here again, if you already have an account with a particular institution, the application process will be easier and faster. If not, an individual should make an appointment, submit a request, provide ID and SIN, and follow the process or registration to issue this investment product.
  • Deposit Brokerage. This is an option for people who seek assistance and want deposit brokerages to do some research on their behalf to search for the most suitable investment options. Besides, they can tell you about insurance protection to help secure it for you in case the provider files for bankruptcy. Such brokerages deal with numerous banks and can seek the most favorable terms and interest rates for each investor.

When Should You Purchase GIC?

What are the situations when buying a GIC makes sense? Consumers will benefit from GIC when they want to save money for a financial aim.

This target may be different including saving for a down payment to purchase a house, for your school tuition, or an upcoming vacation. Getting a GIC may be useful if you plan to generate additional passive income or need to balance the portfolio.

You may use it for saving funds for your comfortable retirement or during maternity leave when you don’t work. Of course, you won’t get the highest interest rates on GICs.

Other investment products may offer higher rates in Canada. However, this is a low-risk and safe option to keep your funds and earn some interest.

There are some things to consider when you are about to add a GIC to your portfolio. Pay attention to the interest as this is an important criterion. Consumers tend to look for a higher rate to boost their earnings.

Furthermore, you should pay attention to the possible deflation and inflation as these factors may also change the number of your earnings. If you calculate and are satisfied with the outcome, getting a GIC may be a reasonable solution.

The Amount of Interest You Will Earn


The following chart published by the Government of Canada demonstrated the average amount of debt for Canadians associated with a certain type of debt.

The chart shows that the average student loan debt or outstanding balance on Canadian credit cards is $28,000.

The average outstanding debt for all Canadian consumers with a vehicle loan is $36,000. For borrowers with a mortgage on a secondary residence, the average debt load is $262,000.

How much interest will you be able to obtain in your GIC? This amount will depend on:

  • Length of your term. You may select a short or a long-term but the GICs with shorter terms generally pay less interest compared to longer terms.
  • The financial provider. Each bank and institution offers various terms and rates on You need to take around and shop for the best purchase.
  • The way interest is calculated. The interest rates on a GIC may be linked to the market, variable, or fixed. Other economic factors may influence the interest rate you select and the amount of interest you will get.

The Bottom Line


In conclusion, GICs or term deposits offer consumers a safe and low-risk investment option. The interest rates may be lower than other types of investments, but this product has more security.

Many Canadians plan to get a GIC to invest in their future and help them achieve their financial aims such as saving for tuition, retirement, vacation, or down payment.