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How do GICs work?

How to cash in GICs Add to ...

When you buy a guaranteed investment certificate (GIC), you will have to decide what you want to do with your money when the term comes to an end — on the maturity date.

3 main options when your GIC matures

  1. Roll it over – Invest all or part of it in another GIC.

  2. Buy another type of investment – Use the money to invest in something else.

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  3. Cash in the GIC – Tell the financial institution whether you want the money deposited in your bank account or ask for a cheque.

Cashing in a GIC early

Before you buy a GIC, find out if there will be a penalty if you have to cash it in early.

  • Cashable or redeemable GICs – You can cash them in early, before the maturity date, without paying a penalty.

  • Regular GICs – You will likely have to pay a charge or penalty for taking your money out early. Even if you only need some of your money, you might have to take it all out. Also, you may not earn any interest on your money.

You won't pay a penalty if you cash in a cashable or redeemable GIC early. With regular GICs, there will likely be a charge or penalty.

Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca


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