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.

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.

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.

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.

References in periodicals archive ?
Guaranteed investment contracts (GICs) are fixed assets with no appreciation potential but which provide income.
Best # 59197) confirmed last month that it has received subpoenas from Florida and Connecticut in connection with a multistate investigation of alleged bid-rigging in the sale of guaranteed investment contracts to municipalities.
Participants in 401(k)s--one of the most common defined-contribution plans--usually have a menu of investment options, including guaranteed investment contracts (GICs) sold by insurance companies, stocks and mutual funds.
The Financial Accounting Standards Board issued exposure drafts on fair value for guaranteed investment contracts (GICs) and on accounting for reinsurance contracts as well as an interpretation about offsetting amounts related to specific contracts.
Currently, however, the insurance company merely invests the plan's assets in such vehicles as guaranteed investment contracts (GICs), deposit-administration contracts, immediate participation guarantee contracts or other insurance company sponsored investment funds.
Grand Central may issue up to $5 billion in guaranteed investment contracts (GICs; rated 'AAAsf' by Fitch) to eligible investors.
The rule, as described by Jackson National, would apply to state-regulated banks and insurers that register insurance policies, annuity contracts, funding agreements or guaranteed investment contracts using Form S-1 or Form S-3.
It also charged $169 million against earnings due to anticipated losses on Guaranteed Investment Contracts that it has sold over the past 15 years.
ARMs are also a fine alternative for IRA or 401 (k) investors who want to move out of guaranteed investment contracts because of their concerns about the quality of the underlying institution.
ING Institutional Markets offers products such as guaranteed investment contracts, funding agreements and notes.
How reliable are guaranteed investment contracts and annuities in today's insurance industry environment?
Regulators weigh the liquidity risks in guaranteed investment contracts and similar instruments after General American's ordeal.

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