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GIC Basics
Guaranteed Investment Certificates and Term Deposits offer the safety and security of knowing that your principal is always protected. Yet today’s GICs also give you more – including the potential for higher returns by participating in stock market performance, or the ability to receive a regular income stream from your investments.
Benefits - Guaranteed Investment
Certificates & Term deposits
Principal Protection
The money you invest in Guaranteed Investment Certificates is completely secure. At the end of the term of the GIC, you are guaranteed to get back your initial investment plus any earned income. The principal and interest earned on your investment is guaranteed by Bank of Montreal. Canadian dollar investments with terms of five years or less are also eligible for further deposit insurance from the Canadian Deposit Insurance Corporation (CDIC).
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Stability
Including GICs in your investment portfolio can help balance the long term, growth component of your portfolio against the safety of principal and security of returns that comes from a GIC. Despite market fluctuation, the stated value of the GIC portion of your portfolio will remain stable throughout the term and will grow when interest is paid.
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Diversification
Diversifying your investment portfolio means spreading your money across a range of different investment options and asset classes. Other methods for portfolio diversification include combining long and short term options, as well as investments with market-based and/or fixed-rate returns. GICs provide greater diversification for security-conscious investors to potentially enhance returns and reduce portfolio risk.
Learn more about how to diversify with GICs.
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Flexibility
GICs offer many features to help you create a
well-balanced investment portfolio. Examples include:
• Range
of terms:
Investment terms range from one day to ten years
• Liquidity:
Cashable GICs that offer the flexibility to fully or partially access your funds
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Generation of steady income
GICs can help you access regular income from your investments. Whether you have retired or simply need to supplement your income from other sources, GICs offer the safety of protecting your initial investment while receiving a steady and predictable flow of income to help with your expenses.
Many of our term investments offer various interest payment options, including monthly, quarterly, semi-annually, and annually.
For example:
BMO Income Generator
lets you earn a competitive guaranteed rate of interest on your investment while receiving a steady stream of monthly income.
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Guaranteed returns or the potential for higher returns
Whether you’re looking for
guaranteed returns or higher return potential, GICs offer a number of
solutions:
• Guaranteed returns
– For investors who want to know what rate they will earn on their investment from the start. Options include investments with a single fixed rate, or guaranteed escalating rates over the entire term of the investment (independent of market conditions)
• Higher return potential
– GICs with returns linked to the performance potential of various market indices, mutual funds or stocks
• Minimum guaranteed
returns with higher return potential – GICs that combine market
potential with predictable, guaranteed returns
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Range of terms to match your investment horizon
Bank of
Montreal offers GICs in a range of terms to match various investor time
horizons.
Terms available include:
• Short-term solutions for investors seeking shorter investment time frames
• Medium-term solutions for investors looking to save for a planned event or to diversify their holdings
• Long-term solutions for investors looking to save for future goals such as retirement
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