Most people have heard of a “GIC” before – a guaranteed investment certificate. Or you may have heard it referred to as a term deposit. You may also know the benefits of having a GIC as part of your investment portfolio – they’re safe and secure, you receive a guaranteed return, with low minimums at great rates, to name a few.
That said, some GICs might suit your portfolio better than others, just like some investments will align with your values. One of those might be a Market-Linked GIC – but what is a Market-Linked GIC?
Some Market-Linked GICs offer a minimum rate of return (like Kindred’s!) and all of them guarantee your principal with the potential for a greater return than a typical GIC. Your investment grows depending on the market performance of a basket of underlying companies during the investment term.
On the maturity date of the GIC, the principal and any return will be credited to the account of your initial investment – or you can discuss reinvestment options with a member of our Wealth and Investment team!
So, is a Market-Linked GIC right for me? That’s a great question! Consider your financial situation and what your short- and long-term financial goals are. An indicator that a market link GIC might be right for you are if you don't have any liquidity needs within the next couple of years so you can put the money aside for three to five years or however long your term to maturity is for the market link GIC. Keep in mind that you cannot redeem your investment before the maturity date – it’s locked in for your term.
Another indicator that this might be right for you is if you would like the guarantees of principal protection and maybe even a guarantee of a minimum rate of return – while also excited by the prospect of enhanced returns from the market!
Consider what companies are in the basket of underlying companies. Do you want to invest globally, locally, or is it important to you to build a more economically, socially, and environmentally sustainable world through socially responsible investment options? Hint: Kindred’s PurposeBuilt Market-Linked GIC is just that!
If you’re still not sure, visit our Market-Linked GIC FAQ page, or speak with a member of our Wealth and Investment team today. We’re here to help! And remember, you can ask us anything.