A Guaranteed Investment Certificate, or GIC, is investment  where you basically lend money to a financial institution and you get back interest, usually after a locked-in period of time.  Usually the longer you lock it in, the higher the interest rate. 

They are considered to be low-risk investments and you can hold them in investment accounts like RRSPs and TFSAs. The minimum investment is usually $500, but there's no maximum limit as to how much you can put in there. The Canada Deposit Insurance Corp, otherwise known as the CDIC, insures eligible deposits up to $100,000 which includes the principal and interest. You'll have to check with them though if you're getting a GIC in a foreign currency. 

However, GICs do come with some downsides.  You have limited returns because of the low-risk.  Depending on the GIC, you can't access that money until the locked-in time period is over.  If inflation continues to climb that GIC might not keep pace and that might potentially eat away at the purchasing power thereby, limiting how much you could have made. 

It's important to seek the help of a financial advisor to make sure a GIC is right for you and your investment goals.  The Government of Canada also has some tips.

You can check out this CIBC GIC rate calculator to see how it might work for you.

A GIC can be a part of any retirement portfolio or plan.  PKAG would love to sit down and discuss what you've currently got, and what you might want to consider. You can also learn more about a solid retirement plan at one of our free, no obligation seminars.