GIC laddering offers you flexibility and liquidity

Investors seeking safe havens often turn to guaranteed investment certificates (GICs), but in many cases don’t realize that these investment products can offer flexibility and liquidity as well as security

Frequently ignored benefits of wisely managed GICs can include penalty-free access to a source of income just when it’s needed and the elimination of guesswork in relation to fluctuating interest rates.

These advantages and more can be secured through a portfolio management technique known as laddering.
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A costly mistake: Waiting for interest rates to rise

Waiting to see how high or low rates will go could be costing you right now

Over the last decade, GIC rates have meandered between 1 and 3% – considered very low, with government bonds even lower. That narrative has only recently begun to shift in 2022, with rates now climbing as high as 4.25% in the first half of the year.

Those assuming rates will continue to trend higher are often enticed into placing their money into shorter term investments, often much lower rates, or parking cash in “high” interest savings accounts (with rates often as low as 1.50% or less). In truth, the upper limit as to where rates will eventually plateau is still unknown. As a strategy, guessing is not that sophisticated – particularly when hard facts are in plain sight.
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