3 steps to buy a GIA
1. Decide how much to invest and for how long
Consider whether you may need to redeem your GIA early. Although GIAs can often be redeemed early, the “market value adjustment” could reduce (or increase) the payout depending on how interest rates have moved since purchase. Some GIAs require a minimum depositMinimum deposit The lowest number of dollars you have to put in a bank account or other investment.+ read full definition.
2. Shop around for interest rates
Compare GIA rates online for the termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition you’ve chosen. Talk to the people that sell GIAs. Ask if you can get a better rate than the one posted. Rates may also depend on the amount of money you’re investing.
3. Choose an insurance agent or deposit broker
You can buy GIAs from advisors licensedLicensed An advisor or firm that has met the standards set by the insurance industry. Regulated by the Financial Services Commission of Ontario (FSCO).+ read full definition to sell life insuranceLife Insurance Insurance that pays cash to your family or other beneficiary after your death. This can give them income and help pay your funeral and other final costs.+ read full definition, as well as insurance companyInsurance company A company that sells insurance products. Some companies sell only life insurance. Some sell only property insurance. Others sell all types of insurance.+ read full definition agents. This includes many advisors at full-service investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition dealers and also independent deposit brokers. You can find an independent deposit brokerBroker A registered person who brings together someone who wants to buy investments with someone who wants to sell. Brokers often charge a fee or commission for buying and selling investments for you.+ read full definition through the Registered Deposit Brokers Association (RDBA).
Compare GIA rates
GIA rates are comparable to GIC rates but they can fluctuate. To compare rates online use these free Cannex surveys that include insurer GIA rates with GIC rates from banks, trustTrust An account set up to hold assets for a beneficiary. A trustee manages the assets until the beneficiary reaches legal age.+ read full definition companies and credit unions.
3 questions to ask
- What happens if you need to get your money early?
- When will you receive interest payments?
- How much will you make in total?
Use this compound interest calculator to see how even small amounts of money saved add up over time.