Investors are understandably nervous about the stock market, and whether it is or isn't a good time to take advantage of some beaten up stocks, guaranteed products have gained in popularity. While it has always been prudent to have a portion of your portfolio in cash or money market funds, there is little reward for a low-risk investment these days. Interest rates are at historic lows.
Shop around for guaranteed products! Don't just accept what your financial institution offers -- less than 1% for a one-year GIC at some banks. One product that you might want to consider is a GIA which is offered through insurance companies. Your financial advisor can provide these products if they are insurance licensed.
A GIA (guaranteed interest account) is similar to a GIC (guaranteed interest certificate) except that the guarantee is provided by Assuris rather than CDIC. Some of the benefits with an insured product include the ability to name a beneficiary on a non-registered account (therefore bypassing probate), creditor protection (especially useful for small business owners and professionals), and cashability. You can also get terms other than the typical 1 - 5 years.
If you want additional protection in your portfolio, or want to be assured that your capital won't depreciate, it's worthwhile to look around for the best options available to you. Interest bearing investments can also be a good choice for your Tax Free Savings account.
