Skip to main content

GICs: when it makes sense to invest

Share:

Women facing away from the camera staring out over mountains.

There are plenty of reasons to choose Guaranteed Investment Certificates (GICs) for your next investment. During times of uncertainty, this is especially true. The security and flexibility of GICs make them a smart way to help you reach your investment goals. Here are a few reasons it might be the right time to invest in a GIC.

1. You want to grow your money, without the risk

When you invest in a GIC, there is no guesswork involved. At the end of your term, you receive a specific amount of interest, in exchange for your investment. Both your original investment – the principal – and the interest earned are guaranteed, making GICs a secure way to help stabilize your nest egg. This security is just what many investors crave in times of market uncertainty.

2. You have a timeline for investment goals

If you have a savings goal – perhaps a holiday, a wedding, or a down payment – you likely have a specific timeline in mind. GICs make an excellent investment for both short- and long-term goals, as they have flexible term lengths, from a few months to several years.

You can further customize GICs to fit your savings goals by choosing the interest rate and terms that suit you best. Is there a chance you’ll need to access to your money early? Are you able to invest over a longer term to secure a higher interest rate? Do you have the time to lock the funds into a Registered GIC?

Whether your savings goal is around the corner or years down the road, the right GIC can be the perfect savings tool.

Explore different types of Meridian GICs

3. You want to balance your portfolio

By choosing a mixture of investments for your portfolio – both equity and fixed income – you help to balance risk with the potential for growth. GICs offer the stability of a fixed term with the peace of mind of guaranteed earnings, allowing you to equate high earnings with low risk.

Many GICs also offer flexibility on interest earnings. If you're willing to accept a higher level of risk, a market-linked GIC can deliver higher potential earnings, with a guaranteed principal investment.

Learn about market-linked GICs

4. You want maximum flexibility

If you want the security of a GIC with the flexibility to access your money in the short term, consider GIC laddering. Simply divide your investment into multiple GICs with different maturity dates – 1-year, 2-year, 3-year, 4-year, 5-year, for example.

This way, one of your GICs will mature each year, giving you the option to use or reinvest a portion of your money. This strategy helps to protect you against drops in interest rates, while allowing you to take advantage of future rate hikes. An important bonus: it also increases your overall annual returns.

GIC Laddered Strategy

5. You need a reliable source of income

If you are living on a fixed income and need a reliable source of revenue, a GIC can be an ideal investment tool. By choosing a GIC that allows you to withdraw guaranteed interest payments at select intervals, you will have predictable income that will help you plan your household finances.

Understanding types of GICs

The right investment feels right

At Meridian, we know you want your investments to feel just right, especially in times of uncertainty. Our wide range of flexible GIC options offer a smart way to reach your goals, while supporting your community.

As a credit union, our Members are our owners. This means more profits from products like GICs are used to help support the communities of the Members we serve. In other words, at Meridian, you’re helping your community while growing your portfolio.

Talk to an advisor

If you have questions about finding the right GIC, reach out to one of our experts. Find an advisor

Boost your investment knowledge

How interest rates work and how they affect you

Compare interest calculator

What kind of investor are you?

Meridian Credit Union communications are intended for informational purposes only and do not constitute financial advice or an opinion on any issue. We would be pleased to provide additional details or advice about specific situations if desired.

For permission to republish this content, please contact the Meridian Credit Union Marketing Department at communications@meridiancu.ca. ©️ 2022 Meridian Credit Union