5 Benefits of Investing in GICs
When investing, it is important to pick an account that is right for you. Not doing your research can leave you with lost profits, high interest rates and confusion. Rather than struggle to understand the type of account you should invest in, we’ve outlined 5 reasons why you should consider a GIC account today.
1. Safe and Secure
Compared to other types of savings accounts, GICs are typically viewed as the safest and most secure way to invest. Unlike other accounts which can be volatile, a GIC provides investor with a secure way of saving. That’s because, there will be a guaranteed interest rate throughout a given period of time. Not only can you be sure of the interest you will be making on your initial investment but most GIC accounts will guarantee you back your initial investment.
Other types of accounts may have fluctuating interest rates, which could leave you at risk of losing money from your initial investment. Some of the best GIC rates tend to be safe and secure, allowing you to feel more confident in your investment.
2. Guaranteed Interest
A GIC is the ideal account for investors worried about losing out on their initial investment. This means, if you cannot risk losing anything on the initial deposit you made, you should only be investing in a GIC account. That way, you can rest assisted knowing you will earn more during your investment period.
3. Ideal for Fist-Time Investors
Many first-time investors are confused when it comes to deciding on an account that’s right for them. That’s why, GIC savings accounts are the perfect solution for first-timers. When it comes to a GIC account, you can invest the money for a long period of time. This is perfect for first time investors as they are typically looking for long-term investment options as they don’t need immediate access to the funds.
In addition, these accounts are perfect for people who may not have financial knowledge, but still want to make a promising investment. As a first-time investor you may not be the most financially savvy which could result in a mis-managed savings. Rather than risk losing out on your investment, you should consider a GIC savings account today.
4. Many Options
There are many different institutions that offer GIC accounts. Oftentimes, these institutions hold special promotions, deals and benefits for signing up and making an investment with them. This can give you the freedom to choose an interest rate and plan that is right for you. Prior to making your initial investment you should do research to compare what certain companies offer. As well, it is important to review all the terms and conditions of a particular account before you sign up for one.
For many GIC accounts, you will not be able to access the funds before the terms of your agreement are up. If you are not made aware of this, and you intend to use some of the money from your initial investment you could be charged a heavy fee. Rather than risk disappointment in your investment, you should understand and clearly know the terms of your account.
5. Eligible for RRSP
One of the perks of investing in a GIC account is the RRSP benefits you are entitled to with it. This means, that with the money you invest into the account you can receive a tax benefit from the investment. It is important to keep in mind that the money you invest into a GIC account will be taxed once it is pulled out and used. Despite this, if you intend to use the account as part of a long-term retirement plan, this is the ideal account for you.