Saving or GIC?

[孔方兄]

Hi, I am a novice here but eager to get more knowledge on investment.

Recently, I am puzzled by the difference between saving account and GIC Provided by the PC finantial

The saving account has an annual interest rate of 4%, while the one-year GIC account also has a rate of 4%. Which one has better return? Why?

BTW, I noticed that a 5-year GIC even has a lower annual interest rate (3.95), which is not logical according to my knowledge.

Can anybody explain these to me? Thanks.

 

[dkwan]

GIC is a guaranteed investment,

Like the mortgage rate, if rate is going to fix for a long term. Bank usually will forecast the economic in the next 5 years before setting the rate. Therefore, PC Financial thinks in the next 5 years, economic will slow down. But still ok in the coming 3.

 

[孔方兄]

Thanks.
If the intersts for both GIC and saving account are fixed to be 4%, which one has better return (including tax)

 

[dkwan]

Majority of the GIC is non-redeemable. its lock-in, cannot take-out.

Money in account can be take out anytime

 

[孔方兄]

I know, I am just wondering why some people would choose GIC when the interest of saving account is the same as that of GIC.

最初由 dkwan 发布
Majority of the GIC is non-redeemable. its lock-in, cannot take-out.

Money in account can be take out anytime

 

[dkwan]

well, discpline.

If its in the saving account, people can use it if they want it.
if the money is in GIC, its lock. then they cannot use it until its matured.

 

[孔方兄]

Except for discipline, is any difference between the two when claiming tax?

最初由 dkwan 发布
well, discpline.

If its in the saving account, people can use it if they want it.
if the money is in GIC, its lock. then they cannot use it until its matured.

 

[greensnake]

the rate of saving account will be changed anytime.