What is a GIC?

A GIC (Guaranteed Investment Certificate) is a low-risk investment where you lock in your money for a set period in exchange for a guaranteed rate of return.

You agree to leave your money with the bank or financial institution for a term (for example, 1, 2, or 5 years), and in return, they promise to pay you back your original amount plus interest.

It’s designed for people who want stability and predictability, not big swings in value.

KOHO High Interest Savings

If you’re not sure about locking in your money for years, an account with high interest savings can be a more flexible option.

With KOHO High Interest Savings, you can:

• Earn a high interest rate on your cash

• Keep your money accessible through the app

• Move funds in and out without committing to a fixed term

This makes it useful for short-term goals or an emergency fund, while GICs can be part of a longer-term, low-risk strategy.

How a GIC Works

The basics:

• You deposit a lump sum (e.g. $1,000, $5,000, etc.)

• You choose a term length (like 1–5 years)

• The institution gives you either a fixed or variable interest rate

• At the end of the term (the maturity date), you get back your original amount plus interest

GICs are generally considered very safe, and at many institutions, eligible GICs are covered by deposit insurance up to certain limits.

Types of GICs

You’ll commonly see:

• Non-redeemable (locked-in) GICs – Higher rates, but you usually can’t cash out early

• Redeemable or cashable GICs – More flexibility to withdraw before maturity, usually at a lower rate

• Market-linked GICs – Returns tied partly to market performance, with your principal typically guaranteed but interest not guaranteed

The trade-off is always the same: more flexibility usually means a lower rate.

When a GIC Might Make Sense

A GIC can be a good fit if you:

• Have money you won’t need for a while

• Want a guaranteed return instead of market ups and downs

• Are building a very low-risk part of your overall plan

If you need access to your money sooner, or want more flexibility, a high interest savings account is often the better place to start.