Guaranteed Investment Certificates (GICs)

GICs are issued by Banks and Life Insurance Companies. They are investments whereby the principal is absolutely guaranteed (up to Deposit Insurance limits) and the rate of the return is fixed and will not fluctuate. They can be held inside both registered and non-registered accounts. One popular approach is to vary the maturity dates of the deposits in a format called a "ladder" so that not all of the renewals come due at once. This is a strategy that protects investors against fluctuations in the interest rate market.

Of note, Life Insurance Companies' GICs offer these additional features:

  • Named Beneficiaries can be named for both Registered and Non-registered accounts thereby avoiding the possibility of Probate
  • Potential for Creditor Protection
  • Potential for Pension Tax Credit Eligibility
  • Potential for Pension Income Splitting