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Articles · GICs

The principal is guaranteed. Your access to that principal is not.

The difference between safety and liquidity, and the three questions to ask before locking money away.

The CompareTaux teamReading: 4 min

Guaranteed does not mean available

The guarantee applies to the principal at maturity. It says nothing about your ability to get the money back before that date, which depends solely on whether the product is redeemable.

Your emergency fund does not go here

Money meant to cover the unexpected must be accessible with no delay and no penalty. Putting it in a non-redeemable product trades a slightly better return for the only quality that mattered.

A market-linked return is not the market

In a market-linked GIC, the return follows a contractual formula with a cap, a participation rate, and averaging provisions. A rising market does not translate into an equivalent return.

The three questions

Can I withdraw before maturity, and at what cost? Is the return guaranteed or conditional? And is the product covered by a deposit insurance regime?

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