When you buy a Guaranteed Investment Certificates (GIC) from a bank, trust company, or credit union, it's like you are lending them your money for a while. The financial institution pays you to borrow your money for a set number of months or years.

How do GICs work?

• You may have to invest at least $500.
• You agree to keep your money in the GIC for a certain amount of time, such as six months, one year, two years, or up to 10 years.
• Most GICs pay you interest. A GIC may pay a higher interest rate than savings accounts, but not always.

Example: An interest rate of 3% means that you get paid $3 each year for every $100 you invest.

• In most cases, the longer you agree to put your money in a GIC, the more interest you will make.
• With some GICs, if you need to get your money back sooner, you won’t earn any interest. In fact, you may have to pay a fee or penalty.

Remember: With a GIC, you agree to lend your money for a set time.

If you think you may need your money back early, buy a GIC that allows you to change your mind without any penalty.