It’s more common for one to know about a mortgage broker, however, when it comes to a GIC broker, many people tend to be clueless. However, if you are looking for a successful investment experience using the Canadian GIC rates, it will be paramount for one to know all the facts about a GIC broker. The GIC brokers are also known as Deposit brokers operate in the same way as mortgage brokers. Their many responsibilities are to shop around for the best GIC rates for their clients. Unlike the mortgage brokers who look for the lowest rates, the GIC brokers look for the highest rates for their clients. This means you will be able to save more from your GIC rates.
- How does the GIC broker work?
The guaranteed investment certificate brokers work together with many financial institutions. Most banks when dealing with individuals directly, they tend to offer low GIC rates, this is because many people don’t have a large pool of funds to offer to the banks. The deposit brokers offer banks an opportunity to get a larger pool of funds because they deal with many clients. This gives them a bargaining power when looking for the best GIC rates. The more money you have to invest, the more you are likely to get a very good interest rate from the bank or the financial institution. Banks also prefer dealing with the GIC brokers since its cost-effective, no administrative costs of dealing with different persons, instead of the bank only operates with the guaranteed investment certificate broker.
- Who will be paying?
What many people don’t know is that the client does not pay the deposit broker; instead, he is paid a commission by the bank or financial institution which will be offering the client the GIC rates.
- GIC broker and spreading your risk
Apart from making sure you get the best GIC rates, the GIC broker will make sure that all the money you invest will be safe. The deposit brokers provide all their clients with GIC insurance. If you buy GIC rates individually from the banks, you receive protection up to a specific amount. However, investing in several institutions will offer you guarantee for all the cash invested in the guaranteed investment certificates. Brokers make sure their clients can spread their clients’’ funds to the different GIC financial institutions.
- Dealing with your Broker
When it comes to dealing with a GIC broker, you have to know that they won’t be handling all your payments. You will be required to make out your check /payment to the banks or financial institution which will be issuing you the GIC. Clients are instructed not to write any checks or payments directly to the brokers. The main duty of the broker is to range for brokering of your investment with the financial institution. Be cautious of the brokers who request you to make payments directly to them.