Episode 230: Why is Everyone Still Running to GICs?

Guaranteed Investment Certificates (GICs) have several downsides. Yet investors keep flocking to them. They typically offer lower returns than other investment options, making it challenging to keep pace with inflation. GICs also lock in your money for a set period, limiting liquidity and flexibility. Moreover, the interest earned on GICs is usually subject to taxation, further reducing overall returns. Additionally, GIC rates can be affected by fluctuations in interest rates, potentially causing missed opportunities for higher yields in a rising rate environment. Learn more about the downsides of GICs today on ThinkSmart.

(04:37): The history of GICs and their dying popularity in the 90s
(06:05): Why is this increase in GIC rates unusual?
(07:45): Deep dive into why GICs can cost you more than you realize
(09:09): How can inflation affect your GICs?
(11:12): Why is there still a run on GICs?
(12:34): How are your investments being taxed?
(14:27): Why are Canadian banks so profitable?
(16:41): Doing it yourself
(17:37): GIC liquidity
(19:38): The real cost of GICs