GIC stands for guaranteed investment certificate. It's an agreement between you and a bank or credit union.
You put in some money. The bank keeps it for a set time, called the term. When the term ends, you get your money back, plus extra money called interest1.
The amount you put in is guaranteed: it can't go down, even if the stock market falls1. The interest rate is usually fixed, so you know from day one how much you'll get back1.
Think of it as lending money to the bank. The interest is the bank's thank-you for letting it use your money.
Who are GICs good for?
- People saving for something a year or more away, like a car, a trip or a down payment.
- People who don't want any risk of losing money.
- People who won't need the money before the term ends.
Most banks and credit unions sell GICs. Many ask for a minimum, often $500 or $1,000. GICs at banks that are members of the Canada Deposit Insurance Corporation are covered by its deposit insurance2 (see Is my money safe?).
Compare. Today's GIC rates are on the main page.