Frequently Asked Questions

Personal Service

You benefit from dealing with a GIC specialist who keeps your conservative needs at the forefront, always.

Best Rates

GICdirect has access to higher GIC interest rates from a network of Banks, Trust Companies and Credit Unions. We shop the market for the highest available rates so you don’t have to!

No Fees

Our services are free of charge.

Security

GICs come with a variety of terms and features, including cashable options. No matter what your selection, all GICs have one advantage in common: guaranteed return of principal. At the end of the term, you will receive the full amount you invested. As many investment gurus have noted, GICs may not make you wealthy but they ensure you hold on to your hard-earned money.

In addition to principal guarantees, as a GIC holder, you are protected against the insolvency of the issuer by Canada Deposit Insurance Corporation or a provincial deposit insurance organization, within their respective limits.

Predictable income

With most kinds of GICs, a fixed rate of return is also guaranteed so you can count on regular income regardless of what the markets are doing. This makes it easier to plan for cash needs during the year or when your investment matures. Working with a deposit broker, you can arrange to receive income as monthly or annual payments, or have your interest compounded to the end of the term.

Stability and growth

When combined in a portfolio containing other types of investments, there is no disputing the contribution made by GICs through market cycles. Thanks to their guaranteed principal and returns, you can be sure that part of your portfolio is always producing – even in market downturns. By balancing the more volatile investments, Guaranteed Investment Certificates also help stabilize the value of your portfolio from year to year. Consider too that GICs help fill the fixed-income component of your portfolio with no MERs and no commissions.

Click here for the video: Why Purchase a GIC?

Click here for the video: How is my GIC protected?

Bank and Trust Companies (including Mortgage Corporations) are members of the Canada Deposit Insurance Corporation. Please visit www.cdic.ca for detailed coverage information and a list of member institutions.

Insurance Coverage for Credit Unions (by Province)

British Columbia

Credit Union Deposit Insurance Corporation (CUDIC) is a government corporation, established in 1958 that provides deposit insurance for members’ deposits. The Financial Institutions Commissions (FICOM), an agency of the Government of BC, is responsible for administering CUDIC and for regulating financial institutions operating in the province. For more information, visit www.fic.gov.bc.ca.

All money on deposit and money invested in non-equity shares with a BC credit union is 100% guaranteed, including foreign currencies and accrued interest, regardless of the length of the term to maturity.

Alberta

The Credit Union Deposit Guarantee Corporation (CUDGC) monitors and regulates the performance of credit unions in Alberta and the compliance of Alberta credit unions with the Credit Union Act. The primary role of the Corporation is to guarantee deposit protection to deposit holders with credit unions in Alberta. For more information, visit www.cudgc.ab.ca.

Each Alberta credit union is required to build and maintain capital to a level outlined in the Credit Union Act and Regulations. A credit union’s capital is comprised of retained earnings, and common shares and investment shares (if any) owned by its members.

The Credit Union Deposit Guarantee Corporation provides a 100% guarantee of all deposits with Alberta credit unions. This protection includes accrued interest to the date of payout. The Government of Alberta ensures that the Credit Union Deposit Guarantee Corporation’s obligation to depositors will be carried out.

Manitoba

The Deposit Guarantee Corporation of Manitoba (DGCM) commenced operations in 1965. Its mission is to guarantee deposits and maintain confidence in the Manitoba credit union system, by focusing on sound business practices, governance, performance and risk management. For more information, visit www.depositguarantee.mb.ca.

All deposit amounts are fully guaranteed and include accrued interest to the date of payout. Deposit amounts include chequing and savings accounts, RRSP deposits, RRIF deposits, foreign currency deposits and term deposits, including those with terms exceeding five years. There is no legislated requirement for the Manitoba government to provide financial support to credit unions.

Ontario

The Financial Services Regulatory Authority of Ontario (FSRAO) is a Provincial Agency providing deposit insurance protection for the members of Ontario Credit Unions and Caisses populaires. For more information, visit www.fsrao.ca.

FSRAO’s insured institutions pay premiums to FSRAO to cover the cost of insuring your deposits. In the event that a credit union is unable to repay all of its deposits, FSRAO pays these up to the maximum prescribed limit of $250,000 for deposits held in each of the separate categories of FSRAO deposit insurance coverage.

Deposit insurance covers eligible deposits up to the prescribed statutory limit of $250,000. FSRAO automatically insures savings and chequing accounts, term deposits (GICs), money orders, certified cheques and registered accounts.

Saskatchewan

Credit Union Deposit Guarantee Corporation (CUDGC) guarantees the full repayment of deposits held in Saskatchewan credit unions. The Corporation is the primary regulator for Saskatchewan credit unions. For more information, visit www.cudgc.sk.ca.

Deposits held in Saskatchewan credit unions are fully guaranteed. There is no limit to the size of deposit covered by the guarantee – whether $100 or $1,000,000 or more. All deposits are fully guaranteed.

The Corporation’s system of deposit protection, including preventive approaches, strong levels of credit union capital and a strong guarantee fund, ensures even the largest deposits are fully guaranteed.

You start by dividing the amount you have to invest into five equal parts and invest five GICs with terms of one, two, three, four and five years. Each year, when a GIC comes due, you reinvest in a five-year GIC. In four years you will have all your money in five-year terms, which generally have higher interest rates than GICs with shorter terms.

In addition to providing greater potential growth with overall higher interest rates, a GIC ladder offers liquidity – ensuring you have access to 20% of your money each year for planned or unplanned expenses. By diversifying maturity dates you also reduce timing risk – the risk of having to reinvest all your money in a year of unfavourable GIC interest rates.

Click here for the video: GIC Laddering Strategy

GICdirect.com updates all GIC rates online twice a day at 8am and 4pm (PST) by province in the Rates and Locations pages.

GICdirect sends out Rate Blasts when interest rates peak or higher than average GIC rates become available, sign up to receive our Newsletter to be added to the list!

However through a Deposit Broker, conservative investors can find GIC rates that beat retail bank GIC rates and even keep up with inflation.

The charts below provides the low and high bank rates over the last 10 years for a 1 year, 2 year and 3 year GIC and benchmark returns for MSCI World Index and the S&P/TSX.

Usually a higher rate is paid in the 5th year with lower rates at the beginning and during the term. The average rate to maturity may not be as attractive as a straight forward five year GIC. The real or effective rate may be less than a 4yr or 5yr fixed rate GIC.

For example, an escalator GIC advertised as 6.00% pays 1.10% in the 1st year, 1.75% in the 2nd year, 2.75% in the 3rd year, 3.50% in the 4th year and 6.00% in the 5th year. One tends to focus on the 6.00%. In this example, the average annual rate of the GIC is actually only 3.02% over the 5-year period.

Always compare a straight term GIC and an escalator GIC to see which is better for you and your investment objectives.

The GIC will not be eligible for deposit insurance if, on the other hand, the agreement between the depositor and the member institution provided for a GIC with a term exceeding five years, or if the GIC was advertised or otherwise offered by the member institution as having a term of more than five years.

Security

GICs come with a variety of terms and features, including cashable options. No matter what your selection, all GICs have one advantage in common: guaranteed return of principal. At the end of the term, you will receive the full amount you invested. As many investment gurus have noted, GICs may not make you wealthy but they ensure you hold on to your hard-earned money.

In addition to principal guarantees, as a GIC holder, you are protected against the insolvency of the issuer by Canada Deposit Insurance Corporation or a provincial deposit insurance organization, within their respective limits.

Predictable income

With most kinds of GICs, a fixed rate of return is also guaranteed so you can count on regular income regardless of what the markets are doing. This makes it easier to plan for cash needs during the year or when your investment matures. Working with a deposit broker, you can arrange to receive income as monthly or annual payments, or have your interest compounded to the end of the term.

Stability and growth

When combined in a portfolio containing other types of investments, there is no disputing the contribution made by GICs through market cycles. Thanks to their guaranteed principal and returns, you can be sure that part of your portfolio is always producing – even in market downturns. By balancing the more volatile investments, Guaranteed Investment Certificates also help stabilize the value of your portfolio from year to year. Consider too that GICs help fill the fixed-income component of your portfolio with no MERs and no commissions.

Click here for the video: Why Purchase a GIC?

Non-registered investments are not registered with the federal government, they do not have limits and earned income must be included as taxable income each year.

RRIFs are the conversion of RRSPs to a payment plan (income fund) in the calendar year the contributor turns 71 years of age. The purpose of a RRIF is to pay out the contributions and interest on a regular schedule to the plan holder by the time they turn 90 years of age.

TFSAs are also considered registered however the contributor does not receive a contribution benefit but the interest earned is tax free. For more information, please see “What is a Tax Free Savings Account?”

Click here for the video: Is an RRSP for me?

• Driver’s license
• Current Canadian passport
• Certificate of Canadian Citizenship
• Certificate of Naturalization

If two pieces of primary ID is not available, one of the following with a primary ID will be accepted:

• Permanent resident card
• Birth certificate issued in Canada
• Old Age Security Card
• Certificate of Indian Status
• Provincial Health Card (cards issued in MB, ON, PEI, or the NWT are not accepted)

You start by dividing the amount you have to invest into five equal parts and invest five GICs with terms of one, two, three, four and five years. Each year, when a GIC comes due, you reinvest in a five-year GIC. In four years you will have all your money in five-year terms, which generally have higher interest rates than GICs with shorter terms.

In addition to providing greater potential growth with overall higher interest rates, a GIC ladder offers liquidity – ensuring you have access to 20% of your money each year for planned or unplanned expenses. By diversifying maturity dates you also reduce timing risk – the risk of having to reinvest all your money in a year of unfavourable GIC interest rates.

Click here for the video: GIC Laddering Strategy