A historical look at the Investment Certificates guaranteed

Guaranteed investment certificates (GICs) are investments that provide Canadians a guaranteed rate of return over a given period of time. GIC are generally provided by banks, credit unions and trust companies.

The earliest forms of guaranteed fixed income investments including investments such as notes and mutual funds. The first fund of Canada, Canadian Investment Fund Ltd. (CIF), was founded in 1932. It changed its name to Spectrum United Canadian Investment Fund in 1996, and this sector has changed its name to the end of August 2002 to CI Canadian Investment Fund. Invest in guaranteed investment certificates, or GIC, is the safe choice and sound as soon as registered retirement savings plans became available in 1957. GIC has been created to give people a guaranteed return on investment. Back in 1970, interest rates on investments were up an average of about 7.7 per cent and, as 15.8 percent in 1982. Part of this high rate of interest was due to inflation of prices higher than today.

Interest rates are lower today. Over the past five years, GIC with a term of five years have paid on average less than 3 percent per year. Because the certificates are guaranteed low-risk investment, there is normally a lower rate of return. With a GIC, the financial institution to borrow money from the person for a specified period of time may be six months, one year, two years, or up to 10 years. When the GIC period is over, your initial investment will be returned with accrued interest.

Owning a GIC you must deposit at least $ 500.00. When the period is over, you can then cash in the taxable income or renew for another term. If you cash out before the end, as it is completed, you will be required to pay a fee. GICs tend to pay a higher interest rate on bank savings accounts, but not most other investments. Interest rates tend to vary from 1-9%.

There are other types of GIC, as GICs growth of the market. Their interest rates depend on the rate of growth in the stock market. This is a bit 'more risky as the market rates tend to fluctuate. Just like regular GIC, GIC market growth rates are low risk, because the initial investment is guaranteed to return.

GIC is a choice of investment popular because of their safety, growth guaranteed. (The interest rate is guaranteed fixed-rate GIC) flexible terms, flexible payments. With some GICs, you can decide how to collect the interest you earn, for example, monthly, annually or at maturity.

Guaranteed Investment Certificates make for a good investment if you want a safe place to save your money. GIC could be used as part of a portion of fixed income portfolio, which is used for supplemental retirement income, or simply to keep your money until you come up with a series of long-term financial strategies.

Guaranteed Investment Certificates have had a long history of providing Canadians with low investment risk financial planning for retirement or other attempts to run them. Investment portfolios will benefit from having an investment with a guaranteed rate of return. Moreover, these investments are often selected during periods of market volatility .......