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Guaranteed Investment Certificate (GIC) is a form of secure investment option, ideal for risk-averse investors. GICs give you guaranteed returns while keeping your principal investment protected. GIC investments are also eligible for CDIC (Canadian Deposit Insurance Corporation) Insurance for up to $100,000 of the investment. There are different types of GICs available in Canada, which have different conditions and returns. On this page, we will take a look at the different types of GICs offered by Scotiabank.
Scotiabank has divided its GIC products into four main categories – Cashable GICs, Non-Redeemable GICs, Market-Linked GICs and Personal Redeemable GICs. GICs offered under these categories are explained below.
Cashable GICs are ideal for investors who want to invest in a GIC but want the flexibility to cash out before its maturity date. Scotiabank’s Cashable GICs can be redeemed anytime; however, if you redeem the GIC in the first 30 days, no interest will be paid. If you decide to withdraw early, you must withdraw at least $500, and the balance remaining after the withdrawal should at least be $500. These types of GICs have a term of 1 year, and the GIC can be renewed automatically when it matures. Scotiabank offers cashable GICs for both non-registered portfolios, as well as registered portfolios, including TFSA (Tax-Free Savings Account), RRSP (Registered Retirement Savings Plan), RESP (Registered Education Savings Plan), and RDSP (Registered Disability Savings Plan). The minimum required investment is $500 if you opt for the interest to be paid at maturity or $5,000 if you want the interest to be paid monthly. Cashable GICs can be useful if you are saving for a goal, such as to buy a car or to go on a vacation.
Unlike Cashable GICs, Non-Redeemable GICs cannot be cashed till they mature. This means that your investment is locked for the term length of the GIC, and you can only access those funds once the GIC matures. Returns on Non-Redeemable GICs are fixed, which means you can calculate the returns before investing. Non-Redeemable GICs typically offer higher returns than Cashable and Redeemable GICs. Non-Redeemable GICs can be a part of your registered or non-registered investment portfolio. You can contact the bank within 30 days of issuing a GIC to cancel it. Scotiabank offers the Non-Redeemable GIC options listed below.
If you are a Scotiabank Preferred Package or Ultimate Package Customer, you can get special rates for specific terms. For example, as of October 2023, Scotiabank Preferred Package and Ultimate Package Customers can get an interest rate of 5.02% and 5.12%, respectively, for a 3-year non-redeemable GIC, while all other customers will get a rate of 4.10% for the same GIC.
Market-Linked GICs are GICs whose returns are linked to the performance of a specific stock index. These GICs are ideal for investors who wish to invest in the stock market but are risk-averse. Scotiabank Market-Linked GICs protect your principal investment and guarantee a minimum return, with the potential to earn more based on the performance of the linked index. These GICs require a minimum investment of $500 and cannot be redeemed before maturity. Scotiabank offers Market-Linked GICs linked to the following indexes:
Market-Linked GICs are eligible for non-registered, TFSA, RRSP, RESP, RDSP and RRIF portfolios.
Personal Redeemable GICs are available to Scotiabank’s personal banking customers. Your investments in Personal Redeemable GICs can be redeemed partially or fully at any time. However, if you redeem before maturity, you will receive interest calculated based on predetermined early redemption rates instead of the original interest rate. This type of GIC is ideal for those who want to hold funds for some time before making an investment or expense, such as before buying a home or a wedding.
Unless the GIC is redeemed early, the interest is calculated on a daily basis and paid annually. Interest is not compounded in the case of redeemable GICs. As of October 2023, the term length available for Scotiabank Personal Redeemable GIC is 24 months, and the terms lengths offered are subject to change. The minimum investment required for these GICs is $500.
Besides the GIC products listed above, Scotiabank also offers a Non-Personal Redeemable GIC for sole proprietorships, partnerships, incorporated and unincorporated businesses, MUSHA (Municipalities, Universities, Schools, Hospitals and Aboriginal Banking), fraternities, associations, and organizations.
Scotiabank also offers the Scotiabank Student GIC Program for international students that can help them show proof of funds and get a study permit faster. International Students can deposit $10,000 in a Scotiabank investment account (a $200 program fee additional) and have access to $2,000 and any interest earned when they arrive in Canada. The rest of the investment is paid back to them in 12 installments over 12 months.
Scotiabank offers a unique GIC product called Guaranteed Income Optimizer. This product provides guaranteed payments for a period of 1 - 10 years. This product is suitable for those who have savings and want to receive a stable income over a period of time, making it a good option for retirees. You can select your payment schedule and amount.
To start investing in Scotiabank GICs, you need to be a Scotia OnLine customer and have an investment plan. If you are not a Scotiabank customer, you must start by opening an account and registering for online banking. You will also have to meet other general requirements that include:
You should ensure that you have adequate funds in your personal banking account before you open a GIC. You can then log into Scotiabank’s online banking portal, click on products and services, and find GICs. When you click on GICs, you will be taken to the GIC information page, where you can start investing in a GIC. Follow the steps in the portal to purchase a GIC.
Alternatively, you can open a GIC in person at a branch or over the phone. To talk to a Scotiabank advisor, you can call on 1-888-777-4614.