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GICs and T-BILLS
Guaranteed Investment Certificates (GICs)
 A term deposit and a GIC used to be somewhat different but now
the words are often used interchangeably
 Usually bought at a bank
 Typically the first kind of investment someone makes
 Similar to a savings account; 100% secure
 Good investment for an extra money you won’t need anytime soon
or won’t need until a particular date
 You agree to lend your money to the bank for a number of months
or years; they agree to pay you a specific amount of interest
 You can’t touch that money for the specified period of time
without being penalized
 When the GIC matures, you get your principal back plus interest
 While the bank has your money, it lends it out to others (car loans,
mortgages, etc.) at a higher interest rate to make a profit
 Most popular GICs are for six months, or 1-5 years
 Generally, the longer the term of the GIC, the higher the interest
rate
 No fee for buying a GIC
 Begin at $500
 Rates may change weekly
 Main advantages: your $ is safe and you know the return you’ll get
Treasury Bills
 Issued by the Government of Canada
 Bought through banks and stock brokers
 Similar to a GIC
 Offered in 3-month, 6-month and 12-month maturities/terms
 Minimum investment is $5000
 Main advantages: your money is safe and you know the return
you’ll get