Guaranteed Investment Certificate (GIC)
A guaranteed investment certificate (GIC) is a savings product you buy at a bank or similar institution. You lock in a sum of money for a set term, often from a few months to several years, in return for a stated interest rate. People choose GICs when they will not need the cash until that date and want a predictable return, usually higher than a regular savings account.
Taking the money out early can cost a penalty. In Canada you often hold a GIC inside a TFSA or RRSP at the same bank. Eligible GICs at CDIC member institutions are generally deposit-insured. In the United States the same kind of product is called a certificate of deposit (CD).
