Guaranteed
Investment
Certificate
A GIC is a kind of fixed-income investment, likes bonds or debentures. A GIC locks your money in for a set period and pays a guaranteed amount of interest. You cannot withdraw the money until the GIC reaches maturity. Because they are guaranteed by the bank, they don't generally pay a high interest rate, about the same as a government T-Bill. GICs are suited mostly for temporarily holding money until a later date when you know you'll need it, like to make a downpayment or pay tuition. If you are investing in the longer term, your money will do better in equities or in the bond market.
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