What are the risk of GIC?

Guaranteed Investment Certificates (GICs) are considered low-risk investments, primarily due to their fixed interest rates and guaranteed returns. However, they do carry some risks, such as inflation risk, where the rate of return may not keep pace with rising prices, effectively reducing purchasing power. Additionally, there is the opportunity cost risk, as funds are locked in for a specified term, potentially missing out on higher returns from other investments. Lastly, while GICs are generally insured in Canada, there is still a risk associated with the financial institution's stability.