SAVINGS / TERM DEPOSITS
GICs and term deposits, explained
Read maturity, interest, early-access and renewal conditions with a worked return example.
Editorial review: October 3, 2026 · Published by Oleksand Tsygan
Understand the commitment before comparing rates
A guaranteed investment certificate (GIC) or term deposit involves placing money for a defined term under a product agreement. FCAC’s GIC and term-deposit guide explains principal repayment, interest, early cashing and renewal information. Its legal-rights discussion applies to federally regulated institutions; it should not be treated as a statement of every Alberta credit union’s obligations.
Begin with a practical question: could you need this money before the term ends? A higher advertised rate is not enough to evaluate a product if its access conditions conflict with the purpose of the money.
Read five parts of the agreement
- Principal and issuer. Record how much you are placing and the legal institution issuing the product.
- Term. Record the start date and maturity date rather than relying only on “one year” or “short term.”
- Interest. Check whether the rate is fixed or variable, how the return is calculated, and whether interest is paid during the term or at maturity.
- Early access. Ask whether redemption is allowed, which conditions apply and what amount you would receive.
- Maturity instructions. Check whether funds are paid out or automatically renewed, and how to provide different instructions.
These questions help you read the document. They do not imply that every GIC offers early access or uses the same renewal rules.
A simple return illustration
A constant $5,000 principal at a hypothetical simple annual rate of 4% for exactly one year produces $200 interest: $5,000 × 0.04. The total would be $5,200 before tax or charges.
This illustration excludes compounding, day-count differences and product-specific conditions. It is not a Servus rate or a forecast. If two products pay interest differently, compare their written calculation methods before treating the headline percentages as equivalent.
What a maturity date changes
Imagine that you need $5,000 for an expense in September, but a product matures in December. The return calculation does not answer whether the money is available in September. Ask for a clear early-redemption answer before committing, rather than assuming the institution will make an exception later.
Make a calendar entry before maturity. At that point, review the next term, rate and access conditions. An earlier product decision does not automatically establish that a renewal fits your needs.
Protection is a separate question
Verify the issuer and whether the instrument is a covered deposit under the applicable scheme. Do not infer coverage solely from the word “guaranteed.” Read our Alberta deposit-guarantee guide for the distinction between deposits and non-deposit investments.
Keep the agreement, maturity instructions and any written clarification together. For money you may need sooner, review savings-account access questions as a separate exercise; this publication does not choose a product for you.
Checked October 3, 2026. Source: linked FCAC guide. Questions, scenarios and calculations are original educational material.