This summer, a wave of Canadians will open their mail to find a GIC renewal notice, and the new rate won't look anything like the 5% they locked in back in 2023.

In this episode of Think Smart with TMFG, we go back to square one on Guaranteed Investment Certificates: what they actually are, why so many people own them without realizing it, and why the timing of this year's renewal wave matters so much.

We also dig into one of the biggest drawbacks of GICs: their tax treatment. Interest income is taxed at your top marginal rate, and accumulation GICs can leave you paying tax on money you haven't even received yet. For retirees focused on keeping their tax bill low, we discuss why those forgotten GICs often show up as an unexpectedly high interest line on a tax return.

From there, we break down the hybrid and index-linked GICs and liquidity risk, why locked-in money can be a problem inside a corporation or in a pinch, and the liquid alternatives like high-interest savings and money market funds that can serve a similar purpose.

Finally, we share practical strategies if GICs are right for you: laddering for liquidity, why you should always negotiate rather than accept the artificially low posted renewal rate, and the importance of watching CDIC coverage limits, especially outside the big five banks.

📌 If you have a GIC coming due this summer, personally or inside your company, feel free to reach out before the renewal date. We'd be happy to help you through those decisions:

Schedule a meeting here

🎧 Listen to the full episode on YouTube.

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