5 Facts You Must Get Right as a GIC Investor


Think of it this way, when you own a GIC, you’re no different from someone watching paint dry. There is, literally, zero drama when it comes to GIC investment and GIC rates. GIC tends to get very little attention when it comes to the investing universe which cares more about stocks and also bonds. Here are some pointers you need to know to fix this problem.

  1. Credit unions are currently beating the banks

McVay and Associates explain that the market share of banks for GIC has gradually fallen over a span of five years by 4.6%. McVay and Associates say that credit unions are the ones who have ended up benefiting most from this followed by mortgage loan companies. This week, if you followed GICs, you noticed big banks offering five-year GIC for rates of between 1.75 and 2.3. While trust companies, credit unions, and other online bank alternatives were offering at least up to half a percentage more than that. Credit unions and trust companies have no chance competing with banks unless they tweak their interest rates to be higher than the banks.

McVay and Associates also explain two financial institutions that are currently making the most gains in this investment type which are the Home Trust company that advertised a 2.9% rate on its site, and the Equitable Bank which announced a 2.91% rate.

  1. Not all insurance plans deposited are credited equally

Credit unions have deposit insurance plans that vary with how each union operates. There are insurance corporations in Canada that protect its members who deposit up to $100,000 in banks and companies inclusive of GICs that have terms of up to five years or even less.

The Deposit Guarantee Corporation of Manitoba provides unlimited protection for its deposits which exceeds CDIC when it comes to the deposits at online banking divisions and credit unions.

  1. Deposit brokers can always get the you top rates

The deposit brokers offer service types that are not so different from those of the mortgage broker, in that they usually survey a wider range of all financial firms to find the best available rates in the market and then handle all the paperwork on your behalf. The guaranteed investment certificate sellers pay deposit brokers directly, and their compensation amount is usually pegged to the invested amount, and also the term agreed.

  1. Deposit brokers are primarily salespeople

The Registered Deposit Broker has been just one of the few designations that the RDBA has administered for the industry. It is always best that you regard any broker that doesn’t have any additional accreditation like a registered financial planner or a certified financial planner. Whenever you are handling any monetary transactions with a broker, it always needs to be in the form of a check that has been written to the financial institution that you are investing with. This makes you a customer with the firm, and not with the broker.

  1. Insurance company GICs, worth a look.

Sometimes referred to as guaranteed interest accounts, all insurance company GICs always want to offer the most competitive interest rates that will make them attractive to the seniors. Mr. Brot, of GIC wealth, explains that the proceeds of any GIC will automatically be directly paid to your beneficiary upon your death without any penalties.


About Author

Comments are closed.