Q&A: GIC investing

Question: I would like to remove my money from the stock market and invest in two non-redeemable GICs for two years at the rate of 2.65%. I have $160,000 and I would like to open up two GICs of $80,000 each with the same bank. Am I allowed to open up two GICs? The reason I will split the money is that I would like to be insured by the CDIC which covers up to $100,000 each. I know the interest is not very high on the GICs, but I do not want to lose my shirt on the stock market at age 63. – George N.

Gordon Pape answers: Yes, you are allowed to open two GICs — or as many as you want. But you will not receive any additional deposit insurance coverage unless you open them at different banks or in different names (e.g. an RRSP, a joint account, etc.). The Canada Deposit Insurance Corporation will only insure up to $100,000 in your name at any one financial institution. However, if you take half the money to the bank across the street and buy a GIC there, both accounts will be protected.

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