Interest in guaranteed investment certificates – or GICs – is booming as investors navigate a high interest rate environment and volatile economic conditions.Finance experts told BNNBloomberg.ca that shorter-term GICs have gotten a boost from elevated central bank interest rates, but cautioned that investors should think carefully about what options fit best with their personal money goals.
That means she expects GIC rates will probably increase over the next short while, after the Bank of Canada hiked its key lending rate to 4.75 per cent last week. Scott Sullivan, principal of Canadian products and analytics at Edward Jones, also highlighted that the current GIC structure suggests rate cuts are coming within a few years. That means shorter term GICs offer higher rates for now, but he cautioned the current forecast suggests it’s unlikely people will be able to reinvest at that rate in a year or two.GIC rates currently go as high as 5.2 per cent, according to ratehub.ca, with others at around three per cent.
“That’s fantastic for portfolio managers like us, because it gives us an ability to earn a return in funds that clients don't want to or can't afford to take risk on,” Berger said in a television interview Wednesday.Macmillan suggested looking at a comparison site such as ratehub.ca when assessing GIC investment options.
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