Since losing your hard-earned money is never enjoyable, one of the first things you look for when you start investing is investment security. Nonetheless, one of the safest investing options available is a Guaranteed investing Certificate (GIC).
When we talk about an investment, we are actually talking about striking a careful balance between meeting your financial needs and risk tolerance while optimizing return. Selecting the GIC rates in Canada that best suits your needs and will yield the highest return is crucial for this reason.
When Is The Money Going To Be Needed?
In actuality, that is the most crucial query. The duration of an investment can be as short as 30 days or as long as 10 years. Given that you may incur penalties if you withdraw the funds before the term is set to expire, it is imperative that you carefully consider when you will use the funds. Your returns may be reduced by those penalties, and you may end up with nothing.
Only choose a longer term if you will not require the funds. Keep in mind that your interest rate will increase with the length of your investment horizon. Longer periods translate into better rates unless it is a mortgage. Avoid deceiving yourself by selecting longer periods than you can actually manage, as you will forfeit all the extra interest you had hoped for if things do not work out.
Would You Like Cashable Or Redeemable Certificates?
GICs can be either cashable or redeemable. You can take the money out of these GICs before the period is up. The cashable rates are typically lower, which is a drawback. For instance, the rates for five-year non-redeemable GICs are approximately 1.70%, while those for five-year redeemable GICs are approximately 1.55%.
What Will You Invest, And How Much Will You Invest?
Minimum investment amounts apply to GICs. Choose a GIC with a lower threshold or think about investing in another kind of investment if you are not ready to make the minimum required amount. Some of them can be started for as little as $500. GICs are not the best option if you want to invest without a large upfront investment and want to grow your fund over time with installments.