Guaranteed investment contract

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Guaranteed investment contract (GIC)

 A pure investment product in which a life company agrees, for a single premium, to pay at a maturity date the principal amount of a predetermined annual crediting (interest) rate over the life of the investment.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Guaranteed Investment Contract

A pension plan purchased through a bank or an insurance company for a lump sum in which the principal is guaranteed by the issuer. One may receive payments from a GIC either in installments or as a lump sum after retirement. A GIC provides the pensioner with a small interest rate that is not guaranteed, but the fact that the principal is guaranteed makes it a relatively low-risk investment.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

guaranteed investment contract (GIC)

An investment product sold by life insurance companies that guarantees a return for a specific length of time on a large, lump-sum premium. Most GICs are funded by transfers from some other pension plan. The return of principal is dependent on the insurance company's ability to satisfy its obligation.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Guaranteed investment contract (GIC).

A guaranteed investment contract, or GIC (pronounced gick), promises to preserve your principal and to provide a fixed rate of return when you begin to withdraw from the contract, typically after you retire.

You can invest in a GIC through a salary reduction plan, such as a 401(k) or 403(b) sponsored by your employer, provided that investment option is offered.

Because of their fixed rates, GICs are vulnerable to inflation. And you may have to pay a penalty if you decide to change from a GIC to a different investment.

Insurance companies that offer GICs assume the risk that the rate they earn on their investments will outperform the rates they've guaranteed on the GICs.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Sun Bank Guaranteed Investment Certificate 3 Years 01438 744 500 7.00% 3 years no withdrawals during term
The other financial services, which include no-fee daily bank accounts, the Interest First savings account (currently offering an above-market rate on deposits), guaranteed investment certificates, low- cost borrowing and the "unbeatable, eatable, mortgage" facility, all appear to be doing well.
Typically, Canadians have invested most of their savings in instruments such as Guaranteed Investment Certificates (GICs), Canada Savings Bonds and term deposits, all perceived to be SAFE investments with little or no risk.
Fixed investments such as guaranteed investment certificates permit you to know ahead of time exactly how much money you will have on hand at a future date for a specific goal.
The savings office offers chequing and savings plans, as well as guaranteed investment certificates. Martin pointed out the savings office does not offer loans.
In addition to mutual funds, the study reveals that Canadians are building their RRSPs with Guaranteed Investment Certificates (GICs) (21 per cent), cash (20 per cent), stocks (11 per cent), bonds (nine per cent) and Exchange Traded Funds (ETFs) (four per cent).
Bonds, treasury bills, guaranteed investment certificates and high-producing mutual funds are their major companion products.
According to the firm, the new brand will offer a line of consumer deposit products, including Guaranteed Investment certificates and a new Oaken Savings Account.
TFSA account holders can choose from a wide range of investment options such as mutual funds, Guaranteed Investment Certificates (GICs) and bonds.

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