The world of investment is a difficult one to conquer at this stage and this is of course especially true when you consider the type of economic circumstances that we find ourselves in at the moment. So if you are able to find something that takes away the uncertainty then obviously this is going to be popular and this is one of the reasons that there is now a lot of interest in GIC rates.
The main draw card of the guaranteed investment certificates or GICs is that the rate of return is guaranteed. A lot of people look at this as a great way to invest their money in something they are sure will give them a good return as opposed to stocks or bonds which while able to give a large rate of return can also yield a low rate of return because of the volatile markets which they are set in. Because of the nature of guaranteed investment certificates they are seen as a low risk investment unlike the stocks and bonds which are seen as a high investment.
In terms of the GIC rates that are used, the percentage is often dependent upon the type of certificate as well as the length of time that the certificate is invested for. For example, you will have a higher rate of return and rate of interest earned if you leave the GIC invested for ten years as opposed to three years. The length of time one invests for can vary from six months to ten years. It is all dependent upon the personal choice of the investor.
The Bank of Canada also has a role to play when it comes to specifying the rate of return. The country’s central bank will determine the interest rate and this will lead to the type of rate that you can get on your investment. They can’t be changed though and this will mean that there is a good deal of influence on your investment.
You will find that there is more than just one type of GIC investment that you can look at and there is one that is potentially higher gain than others. Having said this though, it is important to note that it also carries with it a higher amount of risk as well. This is a type of GIC that is called market growth equivalent or stock indexed GIC which means that if the market grows then you will get the same rate of return.
A period of three years of investment guarantees you a maximum return of 25% and this is unfortunately the highest that you can go. Another potential downfall to the GIC investment is that if the stock does lose or perhaps doesn’t make any gains then you could find that you are not going to get an interest rate above 0%.
Whether you go for the registered or non-registered guarantee investment certificate, it is definitely a safer way to ensure that the money that you invest will yield a good return of investment after a number of years.
So no matter which investment type you decide to take, you can rest assured in the knowledge that with GIC rates you are always going to do better than you would with another type of investment vehicle. So go ahead and make the most of your future.
When you’re deciding to buy a house, some of the factors that you have to take into account are mortgage rates. As mortgage rates are important for home-buyers, GIC rates are important for investors. If you’re interested in a customized financial plan, remember to visit us.
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