GIC basics

GIC Basics

New to GICs? We'll help you learn all the basics you need to know to start investing.

The Guaranteed Investment Certificate (GIC) is one of the safest ways to invest. At the end of the term, you are guaranteed the amount you originally deposited, plus interest.

Conservative investors and those nearing retirement appreciate GICs for their predictability, compared to the volatility of the global stock market. The return is generally less than higher risk investments such as stocks, bonds, or mutual funds.

When you purchase a GIC, you are lending the bank or financial institution your money for a set length of time, which ends on the maturity date. The bank profits by earning higher interest on your money invested elsewhere, so you don’t pay management fees.

Things to Know About GICs:

  • The minimum amount you can invest is $500
  • Typically, the longer the term, the higher the interest rate earned
  • A GIC has no purchase fees
  • Select a variable or fixed interest rate. Most GICs pay a fixed rate of interest for a set term—such as 6 months, 1 year, 2 years, or up to 10 years
  • You can negotiate GIC interest payments to be: monthly, every 3 months, every 6 months, once a year, or only on the maturity date
  • With some GICs, if you need to get your money back sooner, you will have to pay a penalty. Other GICs, such as Cashable or Redeemable GICs allow you to get your money back at any time with no penalty
  • Your money is protected, up to set limits, through the Canada Deposit Insurance Corporation (CDIC). This only applies to GICs with terms of 5 years or less
  • You can hold GICs in registered investment accounts like RRSPs, RRIFs and TFSAs


GICs are a suitable option if you’re looking for a low-risk investment with a guaranteed return. Remember to plan ahead and avoid paying penalty fees by choosing the best term that fits with your investment goals.

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