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This year, like the previous ones, millions of Canadians will search for ways to save and accrue their money. Many of them are now going for GIC and other term deposits in full throttle. It is in effect, a high-interest savings account. I sincerely think this is something you should try too, that is if you have not done that already.
Let us look at the basics first because it is prudent to know what you are getting into.
What is a Term Deposit?
A term deposit is a unique account for a specific amount of money over a set period. The money put in the account and the period are referred to as “deposit” and “term” respectively. The term can range from 6 months to as much as 10 years and most of them pay fixed rates.
In Canada, the most common term deposit is a Guaranteed Investment Certificate (GIC), which the equivalent of the Certificate of Deposit (CD) in the United States.
Types of Term Deposits
Wondering which term deposit to buy? You can choose from the following GICs:
Why You Need a Term Deposit
Usually, a term investment is about investing your money at a fixed rate, so you know what amount you will get at the end of the term.
Other than that, freedom with these deposits is like no other. Some of the things you decide include:
There is also the popular laddering strategy. It allows you to choose several term deposits with different maturity dates.
If you asked me, owning a GIC and other term deposits is like watching the sun rising. You let the bank keep your money and you are certain to get good interest for it. The Canada Deposit Insurance Corporation (CDIC) even protects your savings, albeit to a certain amount.
Current GIC Rates
Are you aware that GIC rates can vary considerably across different financial institutions? That is why it is important to compare the rates whenever you are searching for an account of your needs and preference.
Here are some of the best GIC rates available in the market today:
Deciding whether to buy a GIC or any other term deposit is a question of your financial needs and objectives. If you have some cash that you would not mind getting hands off for some time, try a term deposit.
This account is without a doubt one of the surest methods of saving because, in essence, it is a high-interest savings account. You will rarely come across hidden costs. Essentially, GIC and other term deposits suit investors who are looking for a safe storage of their savings. Instead of doing nothing with your $500, consider saving it with a GIC and other term deposits in Canada.
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