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Finance Dictionary and Glossary of Investment Terms
Guaranteed Investment Contract
GIC. Debt instrument issued by an insurance company, usually in a large denomination, and often bought for retirement plans. The interest rate paid is guaranteed, but the principal is not. also called guaranteed interest contract.
A contract that pays a fixed interest rate for a fixed term, typically one to five years. Many 401(k) plans offer a GIC fund -- often called a stable value fund or an insurance contract fund -- which buys GICs from many different insurers.A GIC fund invests only in guaranteed investment contracts (GICs). The contracts are issued by insurance companies and sold only to pension plans and certain other types of retirement funds. The insurer, not the government, guarantees the contracts themselves.