Guaranteed Interest Account [Starter Guide]

In this article, we’re exploring the Guaranteed Interest Account.

As the name suggests, this is a bank account that can be opened with a guaranteed interest payment.

Not surprisingly, this is a low-risk way to generate a return. But, there are a few factors you should consider before deciding if this account type is right for you.

This article is part of our free series on how to open a bank account, which covers bank accounts for all possible scenarios, including when an account has been deemed dormant.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. Guaranteed Interest Account
  2. Who Can Open a GIA?
  3. Benefits of Opening an Interest Account That Is Guaranteed
  4. Frequently Asked Questions
  5. Ready to Explore Your Options?

Guaranteed Interest Account (GIA)

A Guaranteed Interest Account (GIA) is a bank account with a guaranteed interest rate. The specific rates and terms available will vary by bank. However, GIAs are generally viewed as very low-risk and stable options for generating a return on your deposits. As a result, they are often used for short to medium-term holdings. 

Who Can Open a GIA?

A GIA can be opened by any resident 18 years or older. That said, in most cases, to open a Guaranteed Interest Account, you need to have an existing relationship with a bank. For this reason, most people choose to open a GIA with their existing bank or start the process by opening a new bank account with the bank of their choice.

Benefits of Opening an Interest Account That Is Guaranteed

The benefits of opening an interest-bearing account that is guaranteed are relatively straightforward. First, the return on the deposit is guaranteed and second the “investment” in a Guaranteed Interest Account is considered very low risk.

That said, these two main benefits are not the only benefits you can access from a Guaranteed Interest Account. With this in mind, let’s look at all of the available benefits below:

  • Guaranteed return on the deposit
  • Considered a very low-risk “investment”
  • Offer reasonable interest rates for the market
  • Avoids market and interest rate fluctuations
  • Possible to assign beneficiaries
  • Possible to protect GIAs from creditors

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Frequently Asked Questions

Below are three of the most common questions that we receive from people looking into what a guaranteed interest account is. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.

Are Guaranteed Interest Accounts Safe?

Guaranteed Interest Accounts are as safe as the bank that you choose to open with. With this in mind, it’s important to only open accounts with banks that demonstrate sound financial management, has a strong reputation, and are ideally covered by a deposit insurance scheme.

What Is the Difference Between a GIC and GIA?

The main difference between a GIC and a GIA is that a GIC is a Guaranteed Investment Certificate while a GIA is a Guaranteed Interest Account. With this in mind, a GIC is usually set for a short to medium-term while GIAs can be redeemed whenever the funds are required by the account holder. Both a GIC and a GIA offer low-risk returns on savings to the account holder.

Where Can I Get a 10% Return on My Money?

Where you can get a 10% return on your money will depend on your risk tolerance, time horizon, and ability to withstand volatility. For example, investments with higher perceived risk, like equities, cryptocurrency, and forex may offer a significant return, or they could offer significant losses. On the other hand, a guaranteed interest account will offer lower rates of growth, but with significant confidence that the promised rate will be achieved.

Ready to Explore Your Options?

If you would like assistance navigating your banking options at home or abroad, we can help.

You can access GlobalBanks IQ, our international banking intelligence platform, in just a few clicks. Unlock our bank database, individual bank profiles, account opening strategies and reports, banker scripts, and more.

But, if you want a 100% personalized account opening service that taps into our team’s expertise and provides direct banker introductions, you can get started with GlobalBanks Insider.

Of course, if you have any questions, please contact us directly.

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GlobalBanks Team
GlobalBanks Team

The GlobalBanks editorial team comprises a group of subject-matter experts from across the banking world, including former bankers, analysts, investors, and entrepreneurs. All have in-depth knowledge and experience in various aspects of international banking. In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.

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