A GIC that is not cashable for five years will pay a higher rate than a GIC that has a five-year term but is cashable at any time.

Question

Quizplus · Accepted Answer

A GIC that is non-redeemable for a certain period of time carries a higher interest rate as compared to a redeemable GIC of the same term. The reason being, with a non-redeemable GIC, the bank has access to your money for the given period of time and can lend it out for a longer duration, hence to compensate for that amount of money, they offer higher interest rates.

A GIC That Is Not Cashable for Five Years Will