Guaranteed Investment Certificates (GICs)

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.

Also, take into account that GICs in Canadian dollars (CAD) held not in a registered account are eligible deposits and eligible deposits (not in registered accounts) are insured up to $250,000 through the Financial Services Regulatory Authority (FSRA). If GICs in Canadian dollars (CAD) are held in a registered account, they are also eligible deposits and eligible deposits in registered accounts have unlimited coverage through the Financial Services Regulatory Authority (FSRA).

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redeemable GIC provides more flexibility to withdraw the principal deposited, but generally at a lower interest rate if withdrawn before the deposit term matures.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)

The first step in purchasing a Guaranteed Investment Certificate (GIC) with UCU is to join our credit union as a member. Once you’ve joined UCU, you have the option to buy a GIC or term deposit by either visiting one of our conveniently located branches or reaching out to the UCU Contact Centre at 1.800.461.0777. Our helpful staff will guide you through the process and help you choose which GIC option best fits your goals and financial needs.

Before deciding which GIC to purchase, think about things like the term length, interest rate, and redemption possibilities. We provide a wide selection of GICs at UCU that can match your investing strategy. A member of our experienced staff can assist you in selecting the best solution when you visit one of our conveniently located branches or give the UCU Contact Centre a call at 1.800.461.0777.

Documents required to purchase a GIC from UCU

If you are a member of UCU, there’s no need to provide additional documents to open a GIC. Membership with UCU is required to open a GIC. For membership requirements, please click here.

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

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.

Because they provide consistent and predictable returns, GICs are a good option for cautious investors or those looking to protect their wealth. Additionally, they provide guaranteed principal protection, which ensures that you will receive a return of at least your initial investment plus interest at the rate specified in the contract.

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.

To buy a GIC, you must be a member of UCU. You can apply for UCU membership online from another country, including Ukraine and Europe. For membership requirements, please click here.

GICs for international students in Canada

UCU members that are international students studying in Canada are eligible to open a membership account and buy a GIC with UCU.

A GIC is an investment that, upon commitment for a specified length of time, guarantees the principal amount you deposit and lets you receive a fixed interest rate. You can withdraw both the invested principal and the interest that has been accrued at the conclusion of the GIC term.

A TFSA is a registered savings account that allows you to invest and save money without having to pay taxes on any gains or withdrawals from the account. A variety of assets, including cash, equities, bonds, mutual funds, and GICs, can be held in this versatile account.

The interest earned on a GIC is taxable, and you’ll need to report it on your income tax return. However, if your GIC is held as an eligible deposit within a TFSA, the interest earned is tax-free.

If you keep within your contribution limitations, your investment gains increase tax-free, and when you take the money from your TFSA, you won’t be charged taxes on it. However, deposits made to the account are not tax deductible.

The government sets the annual contribution limitations for TFSAs. The annual contribution cap fluctuates, and unused contribution room can be carried over to future years. Penalties may apply if your TFSA contribution limit is exceeded.

Looking for the best GIC in Canada?

UCU has great options for investors looking for stability and security because it provides a variety of GIC terms with competitive interest rates to meet a range of needs.