These are a safe and sound investment that offer you consistently high-interest rates with a variety of investment terms. However, it’s important to note that the guaranteed return from a GIC is usually lesser than investments such as bonds, mutual funds, and stocks because of its low-risk profile.
Most Canadians are loyal to their leaders and even think they offer the best GIC rates. Contrary to popular belief, you can find the best GIC rates from credit unions rather than large banking institutions. It’s time you started looking for the best deal in GIC rates in the right place.
However, as we’ve always recommended, you should shop around and compare GIC rates from different lenders and credit unions when the interest rates are low. You’ll be surprised to learn that interest rates from banks are stagnating behind credit union banks and online banks. Log in to www.CompareMyRates.ca to find out more.
Banks and Credit unions in Nova Scotia offer a variety of short term and long term investment products. Diversifying your investment across different products is a wise decision that will help you benefit from the various features offered by each product.
A GIC allows you to invest your money at a financial institution for a given period. Your initial investment is guaranteed, and you’re assured of a fixed rate of return based on the duration of your term. The longer you’re going to invest, the higher the interest you’ll earn.
When you invest in a non-redeemable GIC, you won’t be able to withdraw your investment amount until the term has matured. This is an investment for a fixed term. A redeemable GIC, on the other hand, is an investment whereby you can withdraw the funds invested any time without a penalty. With a redeemable GIC, your initial investment amount is guaranteed all the time, and you can withdraw your funds anytime you feel like. It also allows you to choose from several redemption rates available.
One of the most attractive features of a non-redeemable GIC is the high rate of return it offers. Your decision to make a choice between a redeemable and non-redeemable GIC should be informed of benefits provided by each of the products.
Registered GICs are registered with the federal government for tax purposes while non-registered GICs are not registered with the federal government but are still taxable. Registered GICs come in three types namely Tax-free savings account, retirement savings plan, and retirement income plan.
Despite that fact that non-registered GIC are still taxable, only the capital gains earned on the account are taxable. They don’t have limits, and the earned income is supposed to be included as taxable income every year. They come in two types namely commercial and personal.
Guaranteed Investment Certificates are generally considered safe investments since the initial investment amount is always safe. Regardless of what happens in the Canadian market, your GIC will earn some interest although the rate of return will depend on the terms of your GIC product. Non-redeemable GICs offer a higher rate of return than redeemable GICs.