guaranteed investment contract

A debt instrument such as a note that is issued by an insurance company, usually in a large denomination, which is often bought for retirement plans. The investor pays money upfront and then the principal and interest rate payments are guaranteed.

An investment product issued by an insurance company. The investor pays the issuer and in turn receives regular interest payments. The terms of a GIC vary significantly. Some offer a high initial return guarantee, which imposes some restrictions on the investor’s ability to withdraw funds. Similar contracts offered by banks are called bank investment contracts or bank deposit agreements.