Guaranteed Investment Certificates (GICs) can work well for you at any stage of life. They can be a good place to put money that you don’t want to put at risk. If you buy GICs that pay fixed interest, you won’t earn a lot of interest, but you won’t lose any of your principal.

Reasons to buy GICs

You may want to buy GICs if:

• You want a safe place to invest short-term savings. If you won’t need your money for one month or more, you may get a higher return with a GIC than with a bank account. Before you decide, compare how much you’ll get with a high-interest rate savings account.
• You want a safe place to put your money while you think about how to invest it for the long term. You can put your money in a short-term GIC that pays interest while you look at investments that can pay more.
• You want to balance your investment portfolio. If you buy GICs, you will have some safe, fixed income investments to balance options like stocks and mutual funds.

GICs come in many different flavours, each with different options, different maturity dates and different interest rates. Investors often buy GICs that mature and pay interest on different dates. This is known as GIC laddering.

Example: If you have $3,000 to invest, you might put $1,000 in a one-year GIC, $1,000 in a two-year GIC, and $1,000 in a three-year GIC.

Three reasons to ladder your GICs

1. You get access to cash at different times, cash that you can either use or reinvest.
2. If interest rates rise over time, you will be able to access cash to buy GICs that pay the higher rates.
3. If interest rates fall, laddering helps reduce the risk that all your GICs will mature at a time when interest rates are low. 

Remember: Like any investment, GICs have risks.

Laddering can help you reduce the impact of changing interest rates and make investing in GICs work better for you. You may want to work with an adviser to choose the right ones for your investment portfolio.