How GICs fit into your investment strategy


If you’re like many Canadians, you know that you should have an investment strategy, but maybe you’re unsure how to come up with a plan. You might have the basics down, but does it cover your longer-term financial goals? You’ve more than likely heard that you should diversify your investments, but with all of the savings and investment choices out there, how do you choose what is best for you? Let’s have a look at how GICs fit into your long-term investment strategy.

DIY, anyone?

Many Canadians are now opting for self-directed retirement plans, to maintain control of their investments and to save on the high fees often charged by financial institutions or financial advisors. The proliferation of investment information available online for individuals makes it possible to plan and manage a tailored strategy yourself.

A strong self-directed plan might begin with a foundation of solid, low-risk investments that have little to no volatility and may have guaranteed returns. Enter, GICs.

GICs have a number of purposes within an investment portfolio, including;

  •  adding stability when markets are rocky,
  •  providing a short, medium, or long-term place to park funds earmarked for an upcoming expense, like a home purchase, tuition fees, a wedding, or parental leave,
  •  providing guaranteed returns with no hidden fees.

Get on the ladder

GIC laddering is a strategy that can work to your advantage, while providing a stable investment foundation. With a five-year GIC ladder, for example, you would split your funds into five equal portions and purchase a one-year, a two-year, a three-year, a four-year, and a five-year GIC. As each GIC matures, you would then purchase a new five-year GIC, thus creating a cycle of GICs that mature each year. It’s a smart way to help you maximize your returns (five-year GICs typically provide the most return), while having access to cash each year at maturity, if the need arises.

A safe bet

EQ Bank GICs are a safe investment – they are eligible for CDIC coverage and have guaranteed rates. – They may be the ideal choice to form that solid foundation you’re looking for, whether you want guaranteed returns with no fees, or you need to balance out your portfolio. EQ Bank GICs are available in terms ranging from three months to ten years, and you’ll enjoy a high rate that’s guaranteed for the entire term – which means that you’ll have the peace of mind knowing that your money is safe and growing, regardless of what might be happening in the market.

It’s easy to purchase EQ Bank GICs, and even to set up your own GIC ladder. Log in or sign up to get started!
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