A maturing guaranteed investment certificate (GIC) creates the pleasant problem of having cash and the less pleasant problem of deciding what to do with it.
Renewing the entire amount can feel like the sensible choice. The principal remains protected, the return is known in advance, and nobody needs to watch a stock chart behave like it has consumed three espressos.
Yet safety has a cost. Current GIC rates are considerably lower than the returns many investors locked in when interest rates were near their peak. One major Canadian bank recently offered approximately 2.7% on a one-year non-redeemable GIC. That still provides a guaranteed return, but taxes and inflation can consume much of it when the investment is held outside a registered account.
The bigger cost may be the growth surrendered by keeping long-term money entirely in guaranteed investments.
Give each dollar a deadline
Money needed within the next few years generally doesn’t belong in stocks. A GIC remains useful for an emergency reserve, an upcoming renovation, tuition, or the next several years of retirement withdrawals. Money that won’t be required for a decade has a different job. It needs enough growth to protect future purchasing power.
Consider $10,000 compounding for 10 years. At an illustrative 2.7% annual return, it would grow to approximately $13,053. At 7%, it would reach roughly $19,672. Actual stock returns won’t arrive smoothly or predictably, but the $6,619 difference shows what too much certainty could cost.
I wouldn’t move every maturing dollar into the market. I would divide it according to when the money will be needed, then consider investing the long-term portion in durable Canadian dividend stocks. One company that could help bridge the gap between dependable income and long-term growth is Emera (TSX: EMA).
Productive income source
Emera stock owns regulated electricity and natural-gas utilities serving approximately 2.7 million customers across Canada, the United States, and the Caribbean. Its largest businesses operate in Florida and Atlantic Canada.
Regulators approve the infrastructure investments these utilities make and the returns they can earn. That doesn’t eliminate risk, but it can make revenue and earnings more predictable than those of companies relying on discretionary purchases.
Emera stock plans to invest approximately $4 billion during 2026 and $20 billion through 2030. Those projects should expand its regulated rate base, allowing the company to earn returns from a larger collection of infrastructure.
Management expects adjusted earnings per share (EPS) to grow between 5% and 7% annually through 2030. It also believes 2026 growth could exceed that range. Meanwhile, operating cash flow before changes in working capital increased 8% during the first half of the year.
What $10,000 could produce
At a recent $69.33, Emera pays a $0.7325 quarterly dividend. That produces an annualized payment of $2.93 per share and a yield of approximately 4.2%. A $10,000 investment would purchase 144 full shares for $9,983.52. This could generate $421.92 annually, assuming the dividend remains unchanged.
Unlike GIC interest, the dividend isn’t guaranteed. The shares can also decline, particularly over shorter periods. However, investors retain the potential for dividend growth and capital appreciation instead of locking in one fixed return. Holding the stock inside a Tax-Free Savings Account (TFSA) could also keep the dividends and future gains tax-free, provided sufficient contribution room is available.
Considerations
Emera stock carries substantial debt because utility expansion requires enormous upfront investment. Higher borrowing costs, unfavourable regulatory decisions, construction overruns, or weaker-than-expected earnings could pressure both the share price and dividend growth.
The stock also trades around 22 times trailing earnings, so it isn’t a distressed bargain. I’d invest gradually and keep near-term spending money safely outside the market.
Renewing part of a maturing GIC can be entirely sensible. That said, renewing everything simply because the cash has already arrived may leave long-term money earning less than it could.
Bottom line
For investors, protect the portion needed soon and put some of the remainder into a dividend-paying company such as Emera stock. The GIC can preserve tomorrow’s spending. The stock can work on the bills arriving considerably later.
