GIC also called Guaranteed Investment Certificate is a way to invest money in a short/long period of time to get some profit. They usually have higher interest rate than the regular savings account but it all depends.
How does GIC works?
You save a certain amount of money in the bank under GIC, meaning you are lending the money to the bank, so the bank will pay you back some interest. The bank will lend your money to others with higher interest rate and that is how the bank is making profit from it. However, you might not have access to those money. If you need the money and you withdraw the money, you will be subjected to penalty. (unless you choose the redeemable/cashable GIC).
Advise?
If you have $3000. You would put $1000 for a year, another $1000 for two years, and another $1000 for three years. That way you would be able access some amount of money if you need to or you can reinvest it for another year.
Who pays highest Rates?
http://money.canoe.ca/rates/gics.html
Personally I would choose PC financial. However, there is not a HUGE difference in my current saving account rates with the GIC rate, so I am not going to invest in any money just yet.
You can certainly stagger your investments by putting them into every year, however you could also put them into a guaranteed investment certificates where you could take the money out before it's matured. Though you will have a slightly lower rate, you don't have to worry about your money being locked away somewhere.
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