A guaranteed investment certificate (GIC, French: certificat de placement garanti, CPG) is a Canadian investment that offers a guaranteed rate of return over a fixed period of time, most commonly issued by trust companies or banks.
[1] Due to its low risk profile, the return is generally less than other investments such as stocks, bonds, or mutual funds.
At the time of purchase, the rate is higher than the interest on a savings account.
The guarantee for GICs is provided by the Canada Deposit Insurance Corporation[4] (CDIC) up to a maximum of $100,000 (principal and interest combined), as long as the issuing financial institution is a CDIC member[5] and the original term to maturity is five years or less.
However, unlike other GICs there is always a possibility that the market could perform poorly, having even no growth at all, in which the interest rate could return at 0%.