Guaranteed Investment Certificate
A guaranteed investment certificate is usually a Canadian investment which offers a guaranteed return over an extended period of time, usually issued by banks or trust companies. Because of its comparatively low risk profile, the investment is normally less than other similar investments like stocks, bonds, or other mutual funds. Because it offers a relatively high return on investment, this investment type has become extremely popular in Canada and the United Kingdom.
This investment style is different from other types of investment options because it is an unsecured loan. Unlike mutual funds, which use certificates of deposit (CDs) and bonds which use debentures, this investment relies on cash. These certificates are often issued by banks with the provision of additional credit on demand. However, the most common form of CD is 100 percent cash.
Most investors prefer the guaranteed investment certificate, since it requires no deposit. All that an investor needs is access to a bank account. This is beneficial if you wish to invest money in various financial areas without having to meet any form of security deposit requirement. If you do have to meet any form of deposit requirement, you can easily convert this CD into hard cash and use this money to invest in your desired financial field.
As for the different styles of guaranteed investment certificates, there are mainly two types: fixed income certificates and growth certificates. The former specializes in generating income and yields over an extended period of time; while the latter is meant for growth-oriented investors. The latter follows the same investment strategy as the fixed income CDs but also allows investors to make investments in non-traditional areas.
One of the most popular guaranteed annuities in the world is the urobot. This robot is designed to perform the tasks of a trader or a broker, all done automatically. Based on a set series of instructions from the investor, the urobot will buy and sell currency for you. A great advantage of investing in urobot is that it does not require any form of investment contract with another party. Instead, investors are required to provide data on their personal investments and the robot will accordingly invest and generate income on its own. This automated investment contract is considered one of the safest and most guaranteed forms of investing in the world.
Inflation is inevitable. This makes guaranteed investing a sound investment option for those who are worried about the possible effects of inflation on their investments. With inflation, it would be difficult for investors to find high quality items at a low rate of interest. As such, this type of investment is most suited for individuals who would like to make regular monthly investments without worrying about the effects of inflation on their monetary income.
Guaranteed investment certificates also come in the form of guaranteed interest rate certificates. These certificates basically involve a fixed interest rate with a guaranteed minimum interest rate. As such, when you sign up for this type of investment, you will receive a certificate with a pre-determined interest rate. This interest rate is normally determined by the issuing financial institution. Since there is no negotiation between the investor and the financial institution, the interest rate cannot be influenced in any way. What this means for you is that if the market rates drop, your certificate will not be affected in any way.
A guaranteed interest rate also involves a guaranteed maturity date. As such, upon signing up for the investment, you will receive a certificate which has a pre-determined, definite date when the principal will be due to be repaid. This date is based on a number of factors, namely the length of time the investment is open, the amount of total principal, and the current market interest rates. The reason why the date is pre-determined is to ensure that the investor will receive his or her money back on time. As such, the risk to you is minimal as the interest rates are guaranteed to remain at the issued level throughout the term of the investment.
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