TORONTO, Jan. 30, 2014 /CNW/ - Historically low interest rates are no longer holding Canadians back from investing their savings in the security of Guaranteed Investment Certificates (GICs) and doing so for longer terms - two recent trends identified by RBC.
"We're seeing more Canadians opting for terms of three to five years for GICs, compared to last year at this time, and one of the biggest jumps has been investments in market-linked GICs, which tie returns to the performance of a stock market index," said Beel Yaqub, vice-president, RBC GICs & Savings.
Three new market-linked GICs were introduced by RBC under the MarketSmart banner in November 2013, available with terms of two, three and five years, with a minimum deposit of $1,000:
- The RBC Canadian Banking MarketSmart GIC, based on the TSX/S&P Banks Index;
- The RBC U.S. MarketSmart GIC based on the S&P 500; and
- The RBC Canadian Utilities MarketSmart GIC, based on the TSX/S&P Capped Utilities Sector Index.
"Investing in market-linked GICs is like investing with a parachute," Yaqub explained. "You gain the opportunity to benefit from potential returns that stock markets provide, while your principal remains 100 per cent guaranteed, just like a traditional GIC."
Yaqub offered four tips for consideration when investing in a GIC:
- Find the right "fit": Choose the right term for the amount of money you wish to invest. If you don't want to lock all your money into any set term, consider dividing up the money you have to invest into different terms.
- Give your investment a booster shot: Use an automatic savings plan to build up savings to contribute to your GIC.
- Do your own initial research: Check out online resources that offer GIC Selector and GIC Comparison tools - such as www.rbcroyalbank.com/gic - to find out more about the various GIC options now available.
- Talk to the pros: When you're ready to invest in GICs, meet with an RBC advisor to see how these investments - including registered GICs for your RRSP or RRIF - can help you meet your savings goals.
About RBC's Guaranteed Investment Certificates, financial advice and interactive tools
Canadians can access free resources and information about ways to invest in RBC GICs at rbcroyalbank.com/products/gic and RBC's new MarketSmart GICs at rbcroyalbank.com/products/gic/marketsmart-suite. In addition, RBC's GIC Selector and GIC Comparison Tool are available at no cost to help Canadians chose the type of GIC that best fits their lifestyle and goals. Other free interactive tools and calculators, providing customized information covering many facets of personal finance, are available on the RBC Advice Centre. Whether Canadians want to save and invest, protect what's important, borrow with confidence, get more from their day to day banking or take care of their businesses, the RBC Advice Centre can help answer any questions. With the guidance of RBC advisors who are available to chat live, Canadians have access to free, no-obligation professional advice about RBC products and services and personalized one-on-one service at rbcadvicecentre.com.
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Investing with a parachute: RBC MarketSmart GICs match security with higher earning potential
Jan 30, 2014, 06:00 EST