The Naked Buck – Exposing Financial Truth

There is no cost to you to buy a Guaranteed Investment Certificate (GIC) or to get your money out on the maturity date. All the costs are factored into the GIC when you purchase it.  You need to note that if you need to get your money back early you may have to pay a penalty to do so.

How do we make money selling GICs?

• When you invest in a GIC you are lending the bank your money for a period of time and the bank pays you interest on that money.
• The bank is then able to lend your money to others at a higher rate to those borrowing the money.
• The bank makes money on the spread.  This is the difference between the interest it pays to you, and the interest it charges to the borrowers. 
• Even though there is no fee when you buy a GIC, the bank still makes money using your money.

Remember: Your costs are factored into the purchase price for GICs

When you compare GICs to other investments remember to compare the total return after all costs.

For more information on GIC’s or investments please contact Stephen Hill @ financial@septen.com or call 800.932.9989.

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