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"Safety" of GIC's

3891 Views 4 Replies 5 Participants Last post by  SavingMaster
I continually read comments espousing the 'safety' of GIC's as investments. Assuming that GIC's are best held by the risk-adverse who want to protect principal, then isn't it prudent to understand the parameters around CDIC coverage? Even though it's unlikely that Canada's big banks will fail, according to CDIC website, 43 CDIC member institutions have failed since CDIC inception in 1967. I'm asking because a senior friend is this type of investor and his GIC's are structured to maximize CDIC coverage. Am I missing information? Am I over-concerned?
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I consider the CDIC guarantee as strong as a Government guarantee. As explained in the other thread, it is not explicit but I think the Government would lose no time in making it explicit if the public ever wondered about the strength of a CDIC guarantee. Faith in the banking system is so fundamental to our economy that the Government would have no other option but to do so.
I recently reviewed David Trahair's book, Enough Bull, which preaches exactly the all-GIC gospel (laddered over 5 years.) You can find it in link below and there's also two Wealthy Boomer videos to go with it.
I saw him on BNN today and I must say that he didn't do a particularly good job of selling his argument -- particularly when he himself doesn't pursue a GIC only policy.
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