How calculating GIC helps you make more money

How by calculating GIC you can make more returns?

Do you need a guaranteed return on your investment and want something secure? If that's the case, a GIC could be the best option for your savings. Here, we'll define a GIC and show you how to utilize a GIC calculator to estimate your earnings.

What is a GIC?

There is an investment option available called a Guaranteed Investment Certificate (GIC) that ensures a certain return on investment for a specified time frame. Banks and other financial institutions provide GICs, which are covered by the Canada Deposit Insurance Corporation (CDIC) for up to $100,000 per depositor and are therefore viewed as a low-risk investment option.

GIC Calculator

Enter the following information to calculate your GIC value:

How to Use a GIC Calculator?

You should calculate your expected return on a GIC before putting money into one. A GIC calculator can help you estimate your possible returns based on the amount you desire to invest, the length of the GIC, and the interest rate given.

To use a GIC calculator, follow these simple steps:

  • Enter the principal amount you wish to invest.
  • Enter the term of the GIC in years.
  • Enter the interest rate offered by the financial institution.
  • Click on the "Calculate" button to see your potential returns.

It's important to note that the results of the GIC calculator are just estimates, and the actual returns may vary depending on market conditions and other factors.

How does a GIC work?

By purchasing a GIC, you are making a short-term loan to the issuing bank, usually for a period of time between one and five years. In exchange, the bank promises to pay you a regular amount of interest on your savings. Most GICs offer a greater interest rate for longer terms.

If you're searching for a safe investment with a steady return, a GIC could be a good fit. Those who don't want to expose their money to too much risk may also consider them.

GIC Formula & Example

The formula used to calculate the value of a Guaranteed Investment Certificate (GIC) is:

  • GIC value = P * (1 + r)^n


  • P is the principal amount (the amount you invest in the GIC)
  • r is the annual interest rate (expressed as a decimal)
  • n is the number of years the GIC will be held

The formula calculates the value of the GIC at the end of the term, assuming the interest is compounded annually.  For example, if you invest $10,000 in a GIC with an annual interest rate of 2% for a term of 5 years, the formula would be:

  • GIC value = 10,000 * (1 + 0.02)^5  = 11,040.81

Therefore, the value of the GIC at the end of the 5-year term would be $11,040.81. It's important to note that this is just an estimate, and the actual returns may vary depending on market conditions and other factors.

Choosing the Right GIC

You should search around and evaluate the interest rates offered by several financial institutions before settling on a GIC. Before settling on a course of action, you might want to think about the GIC's terms and conditions, including any penalties associated with making a withdrawal before the term ends.

If you're searching for a stable and reliable return on your money, a GIC may be the way to go. You may evaluate your possible profits using a GIC calculator and make a smart investment choice. Keep in mind that finding the right GIC will require some research and comparisons among several banks.