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I need some help or advice regarding GICs. I don’t have much experience with banking or money matters. I finished school not too long ago and was lucky to find a job as quickly as I did. My bank teller was talking to me about investing in GICs.
I normally tend to nod a lot, even when I don’t understand! I get a little nervous. Besides, whenever there is talk on money, I quickly put barriers up and never give anyone an answer. That’s why I came here, to seek some information in a relaxed setting. Is a GIC a safe investment? The teller was talking to me about how it works, but a little of that flew over my head.
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Don’t worry, it is good to be careful, so don’t knock yourself over it.
Remember, the “G” in GIC stands for ‘guaranteed’, so it is safe. That means, whatever you invest, you will still have that initial investment, so you won’t lose anything. It sounds like you are someone who is not a risk-taker. If I am right, then this is a safe option for you.
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Yes, I’m pretty careful and not into taking risks. Let’s say if I invest $5,000. Will I never lose it?
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That’s right. At the end of the period you invest it for, you would have earned some interest, but not a lot. However, your $5,000 will still be there, plus anything else you earned from the interest. The only drawback is, interest rates won’t be great. That’s how this works though.
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Is there a minimum amount to invest?
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This is something you need to find out with whoever you are dealing with. They are all not the same. Some banks or brokers may ask that you invest X amount of dollars because that is the minimum. Other institutions may say there is no minimum. However, they may say that you will receive a higher interest rate if you invest more.
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What if I need to take out the money before the maturity date? What if I have an emergency?
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This depends on which type of GIC you invested in. There is a redeemable and a non-redeemable GIC. It is best to speak with your provider. You will be penalised if you take out a non-redeemable GIC.
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How ironic! It’s my money, yet I can’t touch it?
Speaking of providers, did you use your bank?
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No, I used someone called Omnia Direct. I found it to be better than what my bank was offering. There is also the online convenience, at least for me anyway. Despite being exclusively online, I have never had any issues.
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I may check them out, but I want to speak to my bank first. I’ll make an appointment. I think that would be better. Well, thanks to everyone for your feedback. I understand it all a bit more. Have a good day!
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Glad I could help! You have a nice day too, Natalie.
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