Term Deposits / GICs

Is a Comtech Fire Term Deposit / GIC the right investment for you?

At Comtech Fire we offer a variety of term deposits / GIC certificates ranging from one month, three months, six months and longer terms of one, two, three, four and five years.  You can start your investment with as little as $500 (registered) or $1000 (regular) and feel confident about guaranteed growth as your rate is fixed for the term.  Plus, you have the added protection of deposit insurance of up to $100,000 through DICO for regular deposits and unlimited coverage for registered plans such as RRSPs, TFSAs and RRIFs.  In addition, your Credit Union also offers the highest-value term deposit / GIC rates in comparison to the big banks.

Looking to get the most out of your term deposit / GIC investment?  You may want to consider “Laddering” them.

When you ladder your term deposits / GICs you start by spreading your money in equal parts, across a range of terms, from 1 to 5 years.  For example, if you have $41,000 to invest, you would invest $8200 for one year, 2 year, 3 year and so on.  You now have five term deposits / GICs worth $8200 invested for the next one to five years, each maturing in a different year.  As each term deposit matures, you reinvest those funds in a new 5 year term deposit and repeat this process year after year.  This ensures you capitalize on receiving the top term deposit / GIC rate each year.  If you’re nervous about investing for five years, you can build a shorter ladder, say for three years.  Laddering provides you with less risk and a higher chance of better returns because your entire investment isn’t renewing all at once, possibly at a lower rate.

With laddering your term deposits / GICs, you also have the added flexibility of having the annual interest earned from one or all five term deposits / GICs credited to your day-to-day account for additional income or you can reinvest it for greater returns. In the event that you need funds in any given year, you always have a term deposit / GIC maturing each year.

Below is an example of a 5 Year ladder.  The total Investment of $41,000 is divided into 5 term deposits / GICs of $8200 each.

 
Term Rate Amount Invested
Interest/Income earned 1st Year
1 Year 1.65%* $8200 $135.30
2 Year 1.70%* $8200 $139.40
3 Year 2.20%* $8200 $180.40
4 Year 2.60%* $8200 $213.20
5 Year 3.50%* $8200 $287.00
Total $955.30
 * Rates as of July 27, 2016 and are subject to change.

Invested $41,000 in a 1 year term deposit / GIC at 1.80% the annual income earned would be $738.00 and you would miss out on higher rates of return in laddering your investment.  Invested the $41,000 in a five year term deposit / GIC and all your monies are tied up if interest rates start to rise. Ladder your term deposits / GICs and can capitalize on receiving the top 5 year term rate each year.

 

 

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