To protect your Guaranteed Investment Certificates (GICs), you should take every step you can to make sure they are all insured. You may have to plan carefully, though. It depends on how much you invest and the type of GICs you buy.
Is my GIC safe?
What happens if the financial institution where you bought your GIC closes down or is unable to pay you when the GIC matures? In most cases, your GIC is insured if you bought it at:
- Any major Canadian bank. Banks are members of the Canada Deposit Insurance Corporation (CDIC).
- Similar insurance is available for deposits at credit unions and caisses populaires.
This means you will get your money back, up to certain limits. The insurance is automatic. You don’t have to do anything, and you don’t have to pay anything, to get it.
Tip: The insurance covers up to $100,000 in GICs at each financial institution. US dollar GICs, and GICs with terms longer than five years, are not insured.
I want to buy more GICs than CDIC will insure. How can I protect my money?
The key is to stay within the $100,000 limit at any one financial institution.You can:
- Buy GICs at different financial institutions or their related companies. For example, a bank may have a mortgage company or trust company that sells GICs.
- Put some of the GICs in your name and some in your spouse’s name.
- Own joint GICs with your spouse.
Remember: Your GICs are protected, up to certain limits.
Plan your purchases with care, so you stay within those limits.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.