GICs | EQ Bank (2024)

FAQs

What is a GIC in a bank? ›

A guaranteed investment certificate (GIC) is an investment sold by Canadian banks and trust companies that provides a fixed rate of return to investors. GICs are often purchased as retirement savings vehicles plans because they provide a low-risk fixed rate of return.

For GICs with a 5-year term, Hubert Financial and Ideal Savings currently offer the highest rate at 4.75%.

Customers who add and maintain qualifying recurring direct deposits of at least $2000/month to a Personal Account or Joint Account are eligible to earn a bonus interest rate of 4.00% (the Base Rate plus an additional 1.75%) for the eligible accounts (the Personal Account, Joint Account, and the EQ Bank Card balance).

On all GICs, a single individual can open up to 20 GICs with a per GIC limit of $100,000 and an aggregate limit of $500,000. All EQ Bank GICs, whether registered or non-registered, are non-redeemable, so it can't be redeemed or cashed-in until maturity at the end of the term.

Cons: Limited returns: While offering security, GIC returns may lag behind those of investments associated with higher risk. Inaccessibility: The funds are locked in for the agreed-upon term, limiting liquidity. Inflation risk: GIC returns might not keep pace with inflation, potentially eroding purchasing power.

GICs provide security on your initial investment

GICs offer the advantage of earning a fixed or variable return — unlike savings accounts and some investment accounts. GICs protect what you invest so no matter what happens with the market, you'll never lose your initial investment.

In times of uncertainty and high inflation where interest rates keep going up, are GICs worth it? The answer is a resounding yes because they aren't subject to market fluctuations and will deliver a consistent, guaranteed return when other, more lucrative investments are likely losing money.

To withdraw from a Cashable GIC

Withdrawals from Cashable GICs (in whole or in part) made prior to the maturity date will earn the early-withdrawal interest rate (1%) on the funds withdrawn, calculated back to the date of deposit. The remainder of the GIC will continue to earn its regular rate of interest.

First and foremost, GICs are often considered a solid investment option for those who want safety and stability in their investments. They are also considered low risk because they offer a guaranteed rate of return over a specified period.

For example, the total interest on a $30,000, 60-month loan at 4% would be $3,150.

Is there a catch to EQ Bank? ›

If you're wondering what the catch is – there is no catch. EQ Bank makes money by taking your cash and lending it out to others at a higher interest rate. The difference between what they pay you, and what they lend out on the other side, is large enough to make substantial profits.

The EQ Bank TFSA stands out as the best tax-free savings account in Canada, thanks to its high 3% interest rate and lack of minimum deposit requirements and monthly maintenance fees.

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.

Yes—deposits made under EQ Bank and Equitable Bank are aggregately eligible for CDIC protection up to $100,000, per insured category, per depositor, as outlined in CDIC's "Protecting Your Deposits".

Equitable Bank manages over $74.1 billion in assets and is a wholly-owned subsidiary of EQB Inc. It was founded in 1970 as The Equitable Trust Company and has become Canada's seventh largest Schedule I bank.

How Guaranteed Investment Contracts (GICs) Work. A GIC works a bit like a certificate of deposit (CD) from a bank, although GICs are typically purchased by institutions rather than individuals and often come in much higher denominations. Like CDs, GICs are considered a relatively low-risk investment.

A Guaranteed Investment Certificate, commonly referred to as a GIC, is a type of investment where you deposit money for a set period of time, earning your initial investment and interest back when the time period concludes.

Predictability: GIC returns are traditionally fixed-rate, so interest and the growth of your balance are predictable and unchanging. Low-risk: It's difficult to lose money with a GIC. Your deposits are also CDIC eligible, which will insure your account up to $100,000 in the event the bank where it's invested fails.