Definition
A Window Guaranteed Investment Contract (WGIC) is an investment plan where the investor makes a series of payments to an insurance company, receiving guaranteed returns upon maturity after a specified contribution period. The “window” indicates the time frame during which contributions can be made, after which the contract matures for a designated term before returning both principal and interest.
WGIC vs GIC: A Comparative Overview
| Window Guaranteed Investment Contract (WGIC) | Guaranteed Investment Certificate (GIC) | |
|---|---|---|
| Contribution Type | Series of payments during a defined “window” | Lump-sum investments |
| Risk Level | Low | Low |
| Return Type | Guaranteed return on contributions | Guaranteed return on a single investment |
| Maturity Period | Defined period after the contribution window | Typically shorter, defined in the contract |
| Liquidity | Low liquidity until maturity | Also limited liquidity until maturity |
Related Terms
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Guaranteed Investment Certificate (GIC): A financial product that offers a guaranteed return for a set period, typically requiring a one-time investment.
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Defined Contribution Plan: A retirement savings plan where the amount of the employer’s annual contribution is specified. Employees typically make contributions as well.
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Return on Investment (ROI): A performance measure used to evaluate the efficiency of an investment, calculated as (Current Value of Investment - Cost of Investment) / Cost of Investment.
Illustrative Diagram (Hugo compatible with Mermaid format)
graph LR
A[Start Capital] --> B[Contribution Window];
B --> C[Entry of Payments];
C --> D{Contribution Close?};
D -- No --> C;
D -- Yes --> E[Contract Matures];
E --> F[Principal + Interest Returned];
F --> G[End Capital];
Humorous Insights
“Investing in a WGIC is like a friendly hug from your grandma: guaranteed to make you feel secure, just don’t expect any thrills!” 🤗
Fun Fact: The very first GICs were introduced in Canada, back when rotary phones were still in use! Imagine that, secure investments for a connected world governed by wires!
Frequently Asked Questions
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What happens if I miss a contribution window for a WGIC?
- Unfortunately, the gift-wrapped investment box closes, and no further contributions can be accepted till the next offer.
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Are WGICs insured?
- Usually, yes! Many WGICs are backed by the insurance company, which often has a commendable track record of reliability.
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What happens at maturity?
- Principal and interest are typically returned to you, making for a happy ending! 🎉
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Can I withdraw my investment before maturity?
- Generally, WGICs lack liquidity—you may have to sit tight until maturity.
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What’s the difference between a WGIC and a regular GIC?
- WGICs have a contribution window and guarantee returns based on installment payments, whereas traditional GICs are lump-sum deposits.
Recommended Resources
- Books:
- Investing for Dummies – John Wiley & Sons
- Your Money: The Missing Manual – J.D. Roth
- Online Resources:
Test Your Knowledge: Window Guaranteed Investment Contract Quiz
Thank you for diving into the world of Window Guaranteed Investment Contracts! Like investment socks, they may not be thrilling, but they keep your financial toes cozy and warm! 📈👣
