Benefits of Investing in Term Deposits (GICs)

Term deposits, also known as Guaranteed Investment Certificates (GICs), are exactly what they sound like. A GIC is a certain amount of money held for a set period, at a set interest rate.

The funds you deposit, as well as the interest earned, are guaranteed

This makes them the perfect investment tool for those looking to invest with little to no risk involved.  Since GICs are guaranteed, this can be a much less intimidating step into investing, compared to options that will fluctuate with the markets. This can be very beneficial for those who do not have a long horizon for investing and want to keep their funds as safe as possible.

Who is a good candidate for GICs?

  • Low-risk investors –Those wanting to keep their funds as safe as possible with minimal risk
  • Short horizon investors – Those who do not have a long horizon for investing in products that fluctuate with the market. For example, those close to or living in retirement.
  • Trust account holders and those under 18 – Young people who may not have a large amount of money to invest may think they need to have a large sum of money to start investing. This is not the case! The minimum amount to open a GIC at Northern Birch Credit Union is $500, and for those under 21 the minimum is $100.

Benefits of GICs

  • The interest is stated at the time of deposit, and it will stay that way. The interest your deposit will earn is guaranteed when you lock in the funds.  
  • Our term deposits earn compound interest. That means your interest gains interest and your money grows faster!
  • Our term deposits are non-redeemable*, meaning they are locked in for a certain number of years. This can be helpful if you know you do not need to access funds for a certain period.
  • Do you ever catch yourself dipping into your savings account, just because you can? Are you an impulse buyer? By locking funds into a GIC, you can feel secure knowing your money is growing.
  • Your money is safe in a GIC. Non-registered funds in GICs are insured up to $250,000 at Northern Birch Credit Union, while registered funds in GICs are insured to an unlimited amount. Read more.

Term Deposits within Registered Products

Did you know that you can put the funds you have in your registered products into term deposits?

  • Tax Free Savings Account (TFSA)
  • Registered Retirement Savings Plan (RRSP)
  • Registered Retirement Income Fund (RRIF)
  • Registered Disability Savings Plan (RDSP)
  • Registered Education Savings Plan (RESP)

Our Term Deposit Options

At Northern Birch Credit Union, we offer GIC’s in terms of years locked in, starting with 1 year, and going up to 5 years. We are proud to offer competitive rates. Rates are are subject to change, so it is always a good idea to contact your branch to confirm rates before committing. But don’t worry! Once you have committed, that rate will stay the same for the entire term. Visit our website to see our current rates.

Ready to start investing? Get in touch with our team today!

*We do offer a cashable U.S. GIC 1 year at 0.20% >30 day early redemption 0.05%

Author: NorthernBirchCU

A co-operative financial institution based out of Toronto, Ontario.

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