GIC maturities

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Hi guys, Would you please explain the benefit of buying a GIC with a semi-annual payout as opposed to an annual one? I realize the rate is better for an annual GIC but in both instances your money is locked in for 1 year, correct? Thanks

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Asked on August 14, 2023 1:43 pm
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The benefit would primarily be cash flow. Typically though, GIC's that pay out multiple times a year (they can be monthly, semi annually etc) can offer lower interest rates. For example, there may be a GIC that pays out semi annually that pays 4.95%, while the annual GIC could pay out 5%. You'd have to check with the provider to see if there is any changes in the interest rates for getting multiple payouts a year.

Typically, you will only have the option to get different types of payouts on GICs 1 year or longer. For example, they won't let you get paid out monthly on a 3 month GIC.

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Posted by Dan Kent
Answered on August 17, 2023 8:07 am
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