Royal Bank of Canada has launched two new GICs that have the potential to generate higher returns than traditional GICs.
Unlike ordinary GICs, the RBC ESG Market-Linked GIC and the RBC North American MarketSmart GIC are linked to market performance, allowing investors to benefit from strong market returns. Both products guarantee 100% of an investor’s initial investment.
There is no cap on the returns that can be generated by the ESG GIC. The North American MarketSmart GIC offers a guaranteed minimum return and puts a cap on maximum returns.
The ESG GIC is available in four- and six-year terms and requires a minimum deposit of $1,000. It aims to replicate the performance of the MSCI World ESG Quality Select Low Volatility Index.
The North American MarketSmart GIC is available in two-, three- and five-year terms and requires a minimum deposit of $1,000. It aims to replicate the performance of an equally weighted basket of 20 large North American companies, including McDonald’s, Coca-Cola and Canada’s Big Five banks.
The new products were developed jointly by RBC’s GIC business and RBC Capital Markets.
“Both our new GICs are for investors who want the potential to earn higher returns than those offered by traditional GICs, with the security of having their principal completely protected,” Flora Do, RBC’s vice-president, term investments and savings, said in a release.