US Dollar GIC Rates
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A foreign currency GIC allows you to access currency of the country in question with still bearing an interest. In Canada, one can invest in the Yen of Japan, the pound of Britain, Euro and the dollar of U.S. However, the latter dominates the GICs.
Why invest in foreign currency GICs?
A GIC of an external currency allows you to access currency of the country that it is associated with, if in future its need arises, and interest is earned when it is invested. However, foreign currencies GICs are nowhere found in the travellers’ list. Both U.S. and Canadian dollars are followed by the majority of investors and should you suspect a significant decline in the Canadian Dollar in future, as a result of the decline, you would get a profit if you would invest in U.S. dollar GIC. Therefore, diversification of your cash and preservation your power to purchase would be possible via the addition of an external currency GIC to your investment selection.
Are there any drawbacks to investing in foreign currency GICs?
Here are some of the things you should22 consider when choosing to invest in foreign currencies;
- CDIC insurance does not cover the external currency GICs hence, no guarantee of getting the money back.
- The rates on currency GICs of foreign nature can be minimal, in comparison to GICs from Canada.
- The banks sell the investments and a high rate and buy at a low rate hence diminishing your returns
- For the U.S. GICs and term deposits are not offered within registered accounts.
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