If you’re looking to invest a lump sum of money for a short period of time and want to guarantee your principal is returned, then a short-term GIC would benefit you. When you invest in a short-term GIC, you’ll earn interest on your savings with your principal returned to you. When you compare it to an investment in the stock market, the potential for a loss of your principal exists which is why investors include short-term GICS in their portfolio.

GICs also mature very quickly, so you aren’t locking your money in for an extended period of time like you would with long-term GICs. This allows investors to reinvest their money somewhere else for a short period of time and when interest rates go up, an investor in a short-term GIC can take advantage of better rates once their GIC matures.