Frequently Asked Questions

What is the difference between a general account and a separate account GIC?

The difference between a general account and a separate account Guaranteed Investment Contract (GIC) lies in the management and risk associated with the underlying assets. In a general account GIC, the insurance company combines your money with the funds of other general account GIC customers. This type of account typically offers better returns than savings accounts, as it doesn't require collateral and doesn't rely on the issuer's creditworthiness. It's considered a relatively safe investment. On the other hand, a separate account GIC keeps the underlying assets in separate accounts, managed by the issuer. This arrangement provides a layer of protection for the investor. If the insurance company were to mismanage its funds or declare bankruptcy, the separate account GIC holders would not lose their original principal or the return they contracted for. This is because the assets in a separate account aren’t subject to the claims of the insurance company's general creditors.