5 Guidelines for Buying GICs in Canada

GICs are something that are really worthwhile in investing. Many people all over Canada do so. It is a very popular and relatively safe way to invest your money. There are various channels through which you can buy GICs. If you are looking for a good way to invest your money with low risk, then this is one of the best ways to go. Let’s look closer at how you can buy GICs in Canada.

1. GIC Issuers

Normally, a GIC issuer is a financial institution which issues the actual GIC. There are several of these, which include banks, trust companies, credit unions and caisses populaires.

Banks – Banks are arguably the most popular and recognized issuers of GICs. These include all the large and popular banks like Royal Bank, TD Bank, Scotiabank and Bank of Montreal. There are many Canada Deposit Insurance Corporation (CDIC) firms that also issue GICs. These are smaller banks that offer competitive rates to clients.

Trust Companies – These are similar to banks in the way they operate. They may also be a subsidiary of the bank.

Credit Unions and Caisses Populaires – Caisses populaires is something that many people in Quebec use to do their daily banking. Credit unions can be found all across Canada.

2. Independent Deposit Brokers

Independent deposit brokers work with many banks, trust companies and credit unions. It is kind of similar to how a mortgage broker works with different lenders. They offer better interest rates than many of the larger financial institutions. However, research first before buying through them. You need to make sure that what you get is covered by GIC insurance. They must also be members of Registered Deposit Brokers Association of Canada.

3. Online Discount Brokerage

This is not for everyone. However, if you are pretty savvy and well-versed in all things financial, then this can be worth your while. There are no appointments to see anyone. You basically manage purchasing of GICs by yourself. The good thing about this is, you only pay a smaller commission when compared to a full-service broker. You are basically in charge of everything. You search what product you like and make the purchase.

4. Banks & Trust Companies

To buy GICs with them, you must have an account with them. You need to have deposited something into your account. Most people have bank accounts anyway, so this is not a problem. You need to have enough in your account, because this is the money you will use to buy your GIC. You can do this either on the phone, online or in person, whichever you are comfortable with.

5. Credit Unions

When buying a GIC via a credit union (or caisses populaires), the method is pretty similar to that used by credit unions and banks. However, you need to be a member with them. This will require a payment of a one-time fee, though in general, it is not a lot.

There are many ways to buy GICs. There are times you need to research the best possible GIC rates, while there are other ways that are safe and don’t require much research. It all also depends on how knowledgeable and experienced you are. If you are savvy, you can do things for yourself. If not, seek advice from a qualified professional and purchase GICs that way.