There is no one out there who doesn’t want to save a portion of the earned money and then invest it wisely so that it gives a considerable amount of return. Although the desire is omnipresent, people fail to follow their instincts. If you are thinking of saving for some short term goal, ie like buying a new car, down-payment for a house or a hep model cell phone, then GIC is an ideal option.
GIC stands for guaranteed investment certificate which implies that you would not in case lose your money but instead would receive the money that you had invested with the added interest. How its works is simple. You set up an account with your bank promising them not to withdraw the money for a fixed period for a specific rate of interest. After the period of maturity, you get back your money along with your interest.
The rate of interest might not be more than 1.25-1.5 % yet it is better compared to the ordinary savings account. But for people who fall under the category of high tax. As every money earned is being taxed, you would get only less than already less 1.5% as interest.
So weigh the odds and make a wise decision about whether you want to opt for a GIC or not. For people like me who get tempted very often and use the money saved for a specific goal on buying a new dress or a shopping spree, GIC would be ideal.
