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 GIC Brokers in Canada
GICs or Guaranteed Investment Certificates is a type of investment that is offered in Canada by trust companies and banks. It is a certificate on which a guaranteed rate of return is offered over a predetermined period of time. GICs are secure investment vehicles will in most cases guarantee the return of capital and a guaranteed and predictable interest rate. GICs are a low risk investment and the associated return that it provides on its investment is generally less than other similar fixed income type products. GICs are guaranteed by the financial institution issuing the GIC and additional security is provided in many cases by CDIC and/or Assuris. Please contact CDIC and/or Assuris to see what financial institutions are covered.
What is a GIC Broker?
A GIC Broker is simply a financial consultant or a company that has access to GICs from various financial institutions. In some cases, these GIC Brokers also have access to other investment products which they can offer to investors. GIC Brokers function on a high-volume wholesale level thereby reducing the requirement for the financial institutions employing them to retain a costly branch network and dealing directly with the customers.
These institutions pay the brokers directly and have the ability to pass on cost savings to the investor through higher interest rates in some cases. Furthermore, these brokers have access to a network of smaller and lesser known institutions also who need to offer higher interest rates in order to draw deposits. Therefore, the investor gets the advantage of higher rates and at the same time does not have to pay the broker himself. Sometimes, when GIC rates are high, GICs can be an instrumental part of one’s investment portfolio but we are currently in a different economic environment now and GIC rates are extremely low.
Even the best rate on GICs offered by a GIC Broker will not be significantly higher than that of a standard GIC. GIC interest rates in Canada are currently extremely low and investors are looking for safe alternatives. GICs rates in Canada will also vary depending on the time period of the investment.
The spread between short and long term rates is extremely narrow. An investor may possibly receive a rate that is only 1% to 1 ½% higher on long term rates versus short term rates. However remember, to obtain this higher rate, you have to lock up your funds for a longer period of time – typically 5 years or longer). Because of the low interest rate environment and because of other numerous investments available, investing into GICs is not as popular as 20 years ago. Investors now have the ability to invest into other secure investments which provide capital guarantees in most cases with either fixed or sometimes variable returns.
Visit Guaranteedinvestments.com to view these alternative guaranteed investment products.
Utilizing the services of a GIC Broker does not necessarily guarantee that you will receive a better rate on your GIC investment. In many cases, the only way to obtain a higher rate is by placing your funds with lesser known financial institutions or by locking your funds into longer term GICs. In some cases, you may obtain similar rates with your own financial institution by negotiating with them. However, many individuals feel they should not have to negotiate with their financial institution. In some cases investors simply accept lower rates, and in some cases, investors move their funds to another financial institution.
Canada GIC rates are extremely low and investors should consider investment alternatives in many cases. Secure investment products are available at Guaranteedinvestments.com and the professional financial advisors and investment specialists can help you choose the appropriate solution for your individual needs.
GICs are also available through Guaranteedinvestments.com and the advisors are always happy to provide you with answers to any questions you may have.
Consider GICs and GIC alternatives at Guaranteedinvestments.com
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