Tweet

Everything You Want To Know About GIC Canada Rate

Written by: Canada Mortgage

Article Overview: GIC Canada Rate stands for guaranteed investment certificate, which is a popular type of investment in Canada. The best thing about this investment is that investors get a guaranteed rate of return over a certain period of time. The rate is fixed in the beginning - at the time you are making the investment. For example, you might be promised a return of two percent if you invest for three years. GIC rates do not change with the changing market conditions. No matter how the market behaves at the time of the return, you will get what you are promised. Because of this special feature of the GIC Canada rate, this type of investment has gained rapid popularity in the banking industry in Canada.

Everything You Want To Know About GIC Canada Rate

GIC Canada Rate stands for guaranteed investment certificate, which is a popular type of investment in Canada. The best thing about this investment is that investors get a guaranteed rate of return over a certain period of time. The rate is fixed in the beginning - at the time you are making the investment. For example, you might be promised a return of two percent if you invest for three years. GIC rates do not change with the changing market conditions. No matter how the market behaves at the time of the return, you will get what you are promised. Because of this special feature of the GIC Canada rate, this type of investment has gained rapid popularity in the banking industry in Canada.

A Better Option Than Investing In Stocks Or Bonds

It is true that investing in stocks or bonds can lead to a much larger returns, but the investors have to take risks there. The return is not guaranteed as things change very quickly depending upon the varying conditions in the market. If the market is up, you can make big money, but if the market is down, you may have to suffer big losses as well. There are no such risks associated with guaranteed investment certificates. Whatever the rate is, it is not going to change throughout the life term of your investment. If you have invested for three years, the GIC Canada rates are going to be the same for three years. This way, stocks and bonds are high-risk investments but GIC is a no-risk investment.

Factors That Determine The GIC Rate

There are several factors that are taken into account to determine the GIC Canada Rate. Some important factors include the length of time you are making the investment for and the type of the certificate you are investing in. The longer the investment period is, the higher the rates are. For example, if you invest for ten years instead of three, you are very much likely to be offered a significantly much higher rate. You can generally invest in GIC for a minimum period of six months while the maximum ceiling is ten years. It is up to the investor to decide how long a period they want to invest for. Another important factor that influences the GIC rates is the interest rate specified by the Bank of Canada (the central bank of the country). This interest rate has heavy influence on GIC return, and there is no way to change the rate once specified by the BOC.

How Does It Work?

When you invest in a guaranteed investment certificate from a financial institution, you actually lend a certain amount of money to them for a specific period of time. Once the GIC matures, it is up to you to decide whether you want to renew the investment for another period of time or just want to cash it in. You have to sign a contract with the financial institution when you buy this type of investment certificate. The contract explains all the terms and conditions that will be applicable for your investment, such as the period of time, the amount of money you are investing, the type of certificate, and the GIC Canada rates you have been promised. The institution you buy the GIC from invests your money to other bigger financial groups. No matter how much profit or loss they make from their investment, they are liable to pay the returns to you as per the GIC rates promised in the contract.

Options Other Than The Standard GIC

Besides the standard GIC, where the rates are fixed, there are some other options also that the investors may like to go for. For example, you can invest in stock-indexed or market growth guaranteed investment certificate, where the rates may change depending upon the growth of a specific stock in the market. As compared to the standard GIC, this type of investment carries risks. Though the risk is not very high, but it is there. You can expect huge returns if the stock makes big gains. But, in case the stock does not make any profit and goes in loss, you will not get any return. Another negative aspect about this low-risk GIC is that you cannot earn more than point twenty five percent (.25%) return in a period of 3 years - regardless of how big gains the stock is making.

Depending upon the GIC Canada rates promised to you on your investments, the returns might be paid to you on a monthly, quarterly, half-yearly, or yearly basis.

Related Articles
  Taxation of Non-Resident Franchisors in Canada
  Mortgage Interest Rates In Canada – Fixed Versus Adjustable Rates
  How Much Will A Business Franchise Loan Cost When Financing A Franchise In Canada ?
  Mortgage Canada rates - some implications and considerations
  Ways To Find A Good Mortgage Canada Rate For Your House

Article Tags: banking industry, gic canada, gic canada rate, gic rates, guaranteed rate, investment certificate, investors, rapid popularity, rate of return, special feature
Referred by: http://www.searchengineworkshops.com



Related Forum Posts
Accessing the Canadian Market - Leo, an idea that came to mind is try to align yourself with Hispanic Organizations in Canada. This will build your credibility within communities and get more referrals. Not sure if you plan on being based in Canada or operate your business from Columbia but either way being in the web development arena allows you to work from anywhere. You can also search for opportunities originating from Canada thru elance.com, getafreelancer.com, freelance.com or rentacoder.com
Re: Introducing a US franshise to a Canadian market - [quote="BuzzAroundBooks":1l00q6iy]Hi Everyone, If there was a franchise you liked and located exclusively in the U.S., how likely would you be able to introduce the first one in a new market like Canada? How open are franchisors to this sort of idea? Has anyone heard how this was done in the past?[/quote:1l00q6iy] US franchisors are really open to "export" their concept to Canada for 2 main reasons: the proximity and the culture: Canada is just a few hours away from any US city and both cultures are very similar. I am actually reading stats on this subject as I write and about 80% of american franchises tat go international go to Canada first.
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!
Retired Executives - Hello everyone. Does anyone know where I could be in contact with retired executive? Reason I ask is because I am in seek of a mentor to assist me with my business and I am having a hard time finding a mentor in Canada. It seems like executives in the US and Europe are lot more helpful than in Canada, as I have contacted a few individuals in Canada and they have either been rude or simply did not reply back to my e-mail. Does anyone know where I can find some retired executives, as I might have a better luck with them? Thanks!
Import Hairdryer to Canada - Hi I want to import hairdryer from Italy to Canada. I am looking for information about it because I don’t know what exactly I have to do to import this product to Canada. What do I need to do to import this product to Canada?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Paint A Word Picture - Excite Your Customer

ROSI Return on SUNK Investment

Work at Home Moms and Their Bad Rap?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.