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Things you should know before investing in a GIC

Use GICs to save for a goal

GICs are a safe and reliable way to grow your wealth over time. They are a perfect choice if you are saving for a specific goal that’s a year away or more — you’ll lock your funds away so it’s untouchable, enjoy the added interest boost, and have the funds available when it’s time for retirement, an amazing winter getaway, or another special event in your future.

How GICs work at SCU

With a minimum $500 deposit, you can choose a term that ranges from one to five years. All deposit interest is accrued annually, so after the first year you’ll begin to reap the rewards that come with compounding interest (you’ll earn interest on the interest accrued in previous years).

There’s a few other things you should know about GICs at SCU:

  • As an SCU member, you’ll enjoy some of the best rates in the Manitoba market. View our rates.

  • We offer tiered rates starting at $100,000, so you’ll earn even more interest the more you save.

  • Don’t leave US funds in a low-interest US chequing account – earn a few extra dollars for your next getaway with a US GIC! Terms range from 30, 60, or 90 days, or 12 months, and require a minimum deposit of $500. View our USD GIC rates.

  • All savings in a GIC are guaranteed 100% by the Deposit Guarantee Corporation of Manitoba.

  • You can choose to have your interest compound within the term, or receive an annual interest payout to your account, as long as you choose a like-to-like transfer. For instance, each year you could have your TFSA GIC interest paid to your TFSA variable savings account.

 

Maximize returns in your GIC

The longer the better: With a GIC, the longer the term, the higher the interest rate. Consider the longest term possible given the timing of your savings goal. Because funds are not available until your GIC matures, it’s also wise to keep some cash savings readily available (within a Regular Savings account, for example) to help you manage the unexpected.

Consider laddering: Deposit laddering is an investment strategy that will help you maximize your returns while offering the liquidity to tap into those funds on an annual basis. The concept is simple — divide your total investment dollars by five and deposit these smaller amounts into each of the one to five-year GICs SCU offers. As each term matures, lock-in for an additional five years. In this way, you will have a GIC that matures every year, giving you the option to access some of the money, reinvest what you have, or even add more funds to the maturing GIC.

Explore options at maturity: When your GIC is about to mature, we’ll send you a reminder letter. You can choose to roll the funds into a new term (interest and all), or have the GIC funds set to be added to another savings vehicle of your choice. We offer a 14-day rate guarantee on renewals.

See how much more you can save with a GIC by trying our savings calculator.

 

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