Learn How to Build Wealth Volume 2–Fixed Income & GIC
Another popular fixed income class product is Guaranteed Investment Certificates (GIC). A GIC is an investment vehicle that provides a guarantee rate of return over a specific period of time.
Like other fixed income products, GIC are issued with a fixed rate of return and length of time (term) to be held. Generally, the terms vary from 1 to 10 years.
The predetermined guaranteed rate of return hinges on the fact that the money remains within the GIC for the indicated length of time. Taking money out of the GIC early often results in forfeiting all of the interest earned. Once the term of the GIC is over the money is usually put back into a regular savings account.
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