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What are GICs? Why do you need to know this definition? The MoneySense Glossary is your resource for learning and understanding financial terms.
When you buy a guaranteed investment certificate (GIC), you lend money to a financial institution for a specified amount of time, or term, ranging from one month to 10 years. When the GIC reaches its maturity date, you get your money back plus interest—in general, the longer the term, the higher the interest rate. There are some GICs that pay interest during their term, either monthly, every few months or annually. GICs can have either a fixed or a variable interest rate. The minimum investment is usually $500. If you cash in a GIC before it matures, you may have to pay a penalty, depending on the type.
Example: “Raj diversified his investment portfolio with a mix of equities, bonds and GICs.”
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