How to buy GICs

You can buy GICs at banks, trust companies, credit unions, caisses populaires and some investment firms.

4 quick steps

1. Decide on how much to invest and for how long

With most GICs, your money will be locked in 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 will have to pay a penalty for withdrawing your money early. If you think you may need to get your money out early, buy a redeemable or cashable GIC that can be cashed anytime without penalty.

2. Choose a fixed or variable interest rate

If you want a guaranteed rate of interest, choose a fixed-rate GIC. If you’re comfortable with varying interest rates, consider an index-linked or market-linked GIC.

3. Shop around for interest rates

Compare GIC rates online for the term you’ve chosen. Talk to some banks and financial institutions. Ask if you can get a better rate than the one posted.

4. Choose a financial institution and GIC

If you don’t already have an account with them, you’ll need to set one up. Bring 2 pieces of ID with you. At least one of them must be from the government. The list of acceptable IDs is the same as for opening a bank account. You can pay by cheque or transfer from a bank account or another GIC that is maturing.

Compare GIC rates

To compare interest rates for GICs from banks and other companies across Canada, visit the CANNEX website. Then use this compound interest calculator to compare the difference in accrued interest over different deposit amounts and time periods.

Fast fact

Insurance companies sell an investment similar to a GIC. It’s called a GIA (Guaranteed Interest AnnuityAnnuity A contract usually sold by life insurance companies that guarantees an income to you or your beneficiary at some time in the future. An annuity is a contract with a life insurance company. When you buy an annuity, you deposit a lump sum of money, and the insurance company agrees to pay you a guaranteed…+ read full definition or Guaranteed Interest AccountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition).

3 questions to ask

  1. What happens if you need to get your money early?
  2. When will you receive interest payments?
  3. How much will you make in total?
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