Guaranteed Investment (Interest) Certificate - GIC

A deposit investment security sold by Canadian banks and trust companies. They are often bought for retirement plans because they provide a low-risk fixed rate of return. The principal is at risk only if the bank defaults.

The bank's profit is the difference between mortgage rates and GIC rates. If mortgages are at 8% and GICs are at 5%, then the bank makes 3%.

GICs offer a return that is slightly higher than T-bills.


Investment dictionary. . 2012.

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