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(Updated October 2023)
GIC is short for Guaranteed Investment Certificate, which is an investment vehicle that ensures your initial investment is secure and you receive a guaranteed rate of return on it. Many banks and financial institutions in Canada offer GIC investments, and GICs are considered a very secure form of investment. GIC investments in Canada are insured by the CDIC (Canadian Deposit Insurance Corporation) for up to a $100,000 amount.
There are several types of GICs available in Canada, and the returns you can get with them are based on the type of GIC. For example, if you opt for a non-redeemable GIC, your investment will be locked in for the selected time period, and you will get a fixed return on the investment, but you won’t be able to access the initial investment before maturity. Meanwhile, if you opt for a cashable GIC, you will likely receive a lower rate of interest than non-redeemable GICs, but you will be able to cash the GIC before it matures. The returns on this GIC will depend on when you choose to redeem it. Not all financial institutions offer all kinds of GICs. On this page, we will take a look at different Tangerine GIC products.
Tangerine Bank offers both non-registered and registered GICs. The GICs offered by Tangerine are non-redeemable GICs, which means they can only be redeemed at maturity. If you run into a financial hardship and need to redeem your GIC before it matures, you may apply for early redemption. However, the approval is not guaranteed, and you may lose the interest earned on the GIC even if the application is approved. Non-redeemable GICs have a fixed rate of return, which means you can determine the returns at maturity before investing in the GIC. Apart from Canadian Dollar GICs, Tangerine offers U.S. Dollar GICs as well. Interest for all GICs with terms of one year or longer is compounded and/or paid annually. Meanwhile, for GICs with terms less than one year, the interest is calculated on an annual basis and is paid at maturity.
The non-registered GICs offered by Tangerine are non-redeemable, which means you can redeem them only when they mature. Tangerine offers non-registered GICs with terms ranging from 90 days to five years. There are no monthly fees for Tangerine’s non-registered GICs. The non-registered GICs are held in a non-registered account, and the interest earned will be taxable on an annual basis. No minimum investment amount is specified.
RSP refers to Retirement Savings Plans, and RSP investments in Canada are tax-sheltered. This means that if you invest in an RSP GIC, the amount will be deducted from your taxable income for the year. RRSP (Registered Retirement Savings Plan) is the most common type of retirement savings plan in Canada. The RRSP contribution limit for the year 2023 is the lesser of 18% of your income and $30,780. RRSP contributions rooms are carried forward, which means if you have any unused contribution rooms from previous years, you can use them in the current year. Tangerine offers RSP GICs with terms ranging from 90 days to five years. There are no monthly fees for Tangerine’s RSP GICs. There is no minimum investment, which means you can invest as little as $1.
With Tangerine’s Tax-Free GICs, your GIC investments can grow tax-free, which means the interest earned on these GIC investments is not taxable. TFSA (Tax-Free Savings Account) is one of the most common types of savings account used by Canadians to save for retirement and emergencies. Every year, all Canadians over the age of 18 are able to invest up to a certain amount in their TFSA. The contribution limit for 2023 is $6,500, and the unused contribution room gets carried over to next year. For example, if you became eligible for TFSA in 2021 and never made a contribution, you can contribute up to $18,500 in 2023 instead of just up to the $6,500 contribution limit for the year.
Like other GICs, the terms for Tangerine’s TFSA GICs also range from 90 days to five years. There is no monthly fee for Tangerine’s TFSA GICs, and there is no minimum investment specified. You can also transfer funds from your TFSA accounts at other financial institutions to Tangerine to fund your Tax-Free GIC, but you should carefully monitor your contributions to ensure that you don’t exceed the contribution limit.
An RIF, or Retirement Income Fund, is a type of account that is meant to provide a steady income to retirees. In Canada, an RIF, also known as RRIF (Registered Retirement Income Fund), can be opened at any age and can be funded using the savings from your RRSP account. You can invest in GICs through your RIF account and earn guaranteed returns on them. Tangerine offers RIF GICs with terms ranging from 90 days to five years, and there is no minimum investment requirement. You should also note that while the interest you earn on your RIF investments is not taxed, any withdrawals from your RIF account are considered taxable income and will be taxed accordingly. Tangerine does not charge any monthly fee for RIF GICs.
If you earn in U.S. Dollars or have some savings in USD, you can open a Tangerine USD GIC at attractive interest rates. You can also invest in USD GICs with your savings in Canadian dollars; however, the funds will be converted to USD at the time of investment and back to CAD at the time of redemption. You may end up losing some money in conversion if you choose to do this. Like other GICs offered by Tangerine, the U.S. Dollar GICs also have terms from 90 days to five years. A minimum investment requirement has not been specified. U.S. Dollar GICs are typically held in non-registered and US Dollar accounts. You cannot invest in USD GICs from a TFSA or RRSP account.
To invest in a Tangerine GIC, you first need to open a Tangerine account if you don’t have one. This account will be used to fund your GIC. Once you have an account, follow the steps below:
Investing in Tangerine GICs is very simple, and you can do so from the comfort of your home. You can open a GIC online within just a few minutes. Tangerine’s registered and non-registered accounts come with attractive features such as no monthly fee, high-interest rates, and ease of access. Meanwhile, Tangerine GIC rates are some of the best in Canada, and there is no minimum investment requirement. To get started with investing in Tangerine’s GICs, start by opening a Tangerine account online or call 1-888-826-4374.