Overview
The rate of return on a GIC varies depending on the various factors, such as the length of the term and specified interest rates from the Bank of Canada. At the time of purchase, the rate is higher than the interest on a savings account. The return on the investment will be low, if the savings interest rate becomes higher than the GIC rate of return, and will be high otherwise. The principal amount is not at risk, unless the bank defaults.
Read more about this topic: Guaranteed Investment Certificate