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A Guaranteed Investment Certificate (GIC) is a low-risk investment option for individuals wishing to increase their savings. Members have the opportunity to purchase GICs from UCU. GICs work as a fixed-term investment in which a member deposits money for a predetermined and guaranteed interest rate for a set amount of time, usually months or years. The depositor gets paid back 100% of their original investment plus interest at the end of the period.

Investors can purchase a GIC investment through UCU, selecting from a range of terms and interest rates based on their financial objectives.

Additionally, UCU may provide special features such as flexible terms, attractive interest rates, and reinvestment choices, enabling members to maximize their profits and take comfort in knowing that their investments will yield returns.

GICs offer a degree of stability and predictability by providing a guaranteed return on your investment.

Your funds are locked in for the duration of a non-redeemable GIC, so you won’t be able to access them until the end of the period. Then you get your initial investment back along with the interest that has accumulated. Because of this, GICs are a desirable choice for people who want to increase their assets without taking on too much risk or being affected by stock market swings. A redeemable GIC provides more flexibility to withdraw the principal deposited, but generally at a lower interest rate if withdrawn before the deposit term matures.

Are GIC returns taxable?

Yes, the interest paid on GICs is typically taxable as income in the year it is received, unless the GIC qualifies as an eligible deposit in a tax-sheltered account such as an RRSP (Registered Retirement Savings Plan) or TFSA (Tax-Free Savings Account).

What are the types of GICs?

There are several varieties of GICs, such as:

• Redeemable: allowing for early withdrawal with penalties (Term Deposits)
• Non-redeemable: no early withdrawal option (GICs)

GICs are regarded as secure investments because the principal and interest are guaranteed by the issuing financial institution.

Eligible GICs in Canadian dollars (CAD) held in a non-registered account are insured up to $250,000 through the Financial Services Regulatory Authority (FSRA). GICs in Canadian dollars (CAD) held in a registered account have unlimited coverage through the Financial Services Regulatory Authority (FSRA).

There are some significant distinctions between Guaranteed Investment Certificates (GICs) and High-Interest Savings Accounts (HISAs):

• A GIC is a solid and secure investment that guarantees the principal amount you invest and lets you receive a guaranteed interest rate when you commit to a certain length of time. At the end of the GIC term, you can access both the principal amount deposited, and the interest earned.

• A High-Interest Savings Account has greater interest rates, compared to conventional savings accounts, but the interest rate is subject to change.  On the other hand, you are not required to keep your money invested for a certain amount of time and you can withdraw your deposit more easily.

Check the terms and conditions of your GIC agreement and Certificate of Deposit before deciding to withdraw from it. Your GIC will either be deposited into your UCU account or reinvested for the same term at the current interest rates, based on the instructions you provided at the time of the initial investment. For additional information about GICs at UCU, get in touch with your local branch or give the UCU Contact Center a call at 1-800-461-0777.

Can I cash out my GIC before it matures?

It depends on the type of investment you have. Non-redeemable GICs do not allow early withdrawal. Redeemable GICs allow for early withdrawal, but have conditions attached to the amount of interest that will be earned if there is an early withdrawal.

How to check GIC deposit balance?

Please log into your online banking to check on your UCU account balances. Alternatively, please call the UCU Contact Centre at 1-800-461-0777 for information about your account.