Myths must always surround any money scheme. Even the best GIC rates haven’t been spared from this; there are several myths that many people have come across when asking about the guaranteed investment certificates. Most of the time, these myths discourage people from investing in GIC. Never the less we look at some of the common myths and misconceptions associated with GIC and give you the correct clarification.
- GIC investment is only for the inexperienced or conservative investors
GIC investment opportunity is suitable for every investor. They are an important part of a balanced investment portfolio. A balanced investment portfolio is made up of stocks, bonds, mutual funds and GICs. This reduces the level of risk and creates steadier returns over the investment period. GIC rates are crucial for building a good investment portfolio. A reliable investment opportunity, especially for those who own small businesses.
- The GIC rates are for the older investors
If you look at the GIC investors in Canada, most of them are below the age of 55. Ever since the innovative escalating rate was introduced, together with the cashable GIC rates and the index-linked GICs, the younger generations have gained more interested in guaranteed investment certificates. With GIC investment opportunity one has the opportunity to save for a vacation, a house, etc.
- GIC investment brings low returns
Investors can enjoy maximum returns by picking the most suitable GIC investment. There are different GIC rates that one can use to make sure they have the highest returns. The GIC rates that are Premium, e.g., CIBC Bonus GIC rate and CIBS Escalating GIC rate (non-redeemable) have the best rates compared to the long-term GIC rates. To make the best out of your GIC investment, it’s crucial to do some serious research before you buy your GIC investment.
- Those who expect the GIC interest rates to rise shouldn’t invest in GIC
There are available GICs which are perfect despite the environment of the interests’ rate. In addition to that, there are the escalating GIC rates that investors can consider and they tend to be very competitive since they are expected to increase after each year. Investors who want a GIC rate that has the flexibility of redeeming the GIC investment before maturity then they can utilize the escalating GIC rates. It’s also a good opportunity for investors to invest in an investment environment that has an increasing interest rate.
The following tips will help you in laddering your guaranteed investment certificates.
- Having a GIC investment as part of your investment portfolio will boost your investment plan. GIC functions by laddering and staggering your investments, in equal measures between the many GICs. You have the option of reinvesting each time a GIC investment matures.
- The long-term GIC interest rates attract higher returns.
Consulting with a GIC broker will be helpful in determining which rates are the best. The other important thing is to make sure you pick the best financial institution to buy your GIC rate from.