how banks profit from gics
a bank profits from offering gics by lending out the money deposited at a higher rate than the interest it pays on gics if the bank sells mortgages at 8 interest and its gics pay 5 the bank earns 3 in profit gics offer a slightly higher return than treasury bills or t bills making them an excellent option to diversify a stream of liquid safe securities in a portfolio as noted above many canadian banks and trust companies sell gics while a trust company does not own the assets of its customers it may assume some legal obligation to take care of them in these instances trust companies act as fiduciaries agents or trustees on behalf of a person or business entity they are a custodian and must safeguard the money and make investment selections that are solely in the interest of the outside party gics along with t bills treasury bonds and other income producing securities are safe and relatively liquid investments making them particularly attractive to retired investors seeking a stable stream of income gics and u s treasury securitiesother forms of safe and income producing securities are u s treasury securities including t bills t notes and t bonds gics and u s government securities can be cornerstones of certain portfolio strategies either those that rely on safe streams of income or as a hedge that balances out riskier investments such as growth stocks and derivatives 