Index-Linked Term Deposits: What to know before investing.

“I want to get involved in the stock market, but don’t want to risk losing my principal investment.”

Sound familiar?

If you’ve ever wanted an investment option that offers market exposure with less risk, meet the Planet-Wise™ Index-Linked Term Deposit (ILTD): it’s a unique investment that offers the potential to earn a higher return with less risk than other market-based investments. And your principal investment is guaranteed.

Plus, with Vancity, your non-redeemable1 Planet-Wise ILTDs go further, supporting a portfolio that excludes sectors that don’t meet standards for sustainable products and services, like oil & gas.

In this post, we’re tackling the features and benefits of Index-Linked Term Deposits, including our Planet-Wise option, to help you decide if an ILTD is right for you.

But let’s back up — first of all, what exactly is a term deposit?

Term deposits.

You may have come across the name ‘term deposits’ in your financial travels; maybe you’ve even invested in a few. A term deposit is an investment that lets you put away a set amount of money for a set amount of time and receive a set interest rate in return.

For those looking for an investment that will earn a set amount on top of your deposit, check out our term deposits. But if you’d rather link your investment to the performance of select securities, that’s where the ILTD comes in.

Index-Linked Term Deposits.

What if you prefer the risk level of a traditional term deposit, but also want the potential to grow your investment?

In that case, you might consider an ILTD, which links your investment to select securities while protecting your principal.

With an ILTD, you earn a return based on performance of a bundle of companies. Your return will be calculated on the average of how the investments do at approximately 7, 30, and 60 days prior to the date of maturity. Plus, you have the potential to earn higher interest than a traditional term deposit without any extra fees.2

Why choose Vancity for your ILTD.

At Vancity, you have the option of a 3-year or 5-year non-redeemable1 ILTD. No matter which option you choose, start investing with as little as $1,000 and no fees or commissions. Your principal investment is guaranteed and so is your minimum rate (if applicable).

Plus, our Planet-Wise ILTD let you invest in a portfolio that excludes sectors that don’t meet standards for sustainable products and services, like oil & gas. Not only is your Planet-Wise ILTD return linked to stock performance, but it also considers ESG3 criteria.

Need advice?

Think a Vancity Planet-Wise Index-Linked Term Deposit might be a fit for you? You can book a one-to-one planning appointment with one of our wealth management professionals at Vancity, to talk about options relating to your situation. They can also help advise you on the different types of investment products for RRSPs.

Not a Vancity member? Open an account today.

A Planet-Wise Index-Linked Term Deposit is just one more way you can be part of a financial force for change. Terms and conditions apply.

1This Index-Linked term deposit may not be negotiated, transferred or redeemed until the end of either the 3-year or 5-year maturity date. Additionally, for RRIF products, funds may not be withdrawn to satisfy any minimum RRIF withdrawals. Index-Linked term deposit within a RRIF account will not be redeemable until the maturity date.

2 The interest paid at maturity, if applicable, is subject to a minimum and maximum cap rate. If the calculated return of the list of companies is higher than the maximum interest amount at maturity, then the interest paid will be the maximum amount disclosed in the Terms and Conditions. If the calculated return of the list of companies is lower than the minimum interest amount at maturity, then the interest paid will be the minimum amount disclosed in the Terms and Conditions. This applies for both Planet-Wise 3-year and 5-year term deposit.

3ESG (Environmental, Social and Governance) screening excludes companies that have exposure to unsustainable products or services and thereby are omitted from our portfolio. Exclusions are based on revenue screening with companies earning 5%* or more revenue from direct big 5 products and service offerings excluded form investment. Big 5: Tobacco, Gambling, Adult Entertainment, Weapons and Nuclear Power.

Your deposits are 100% guaranteed.

Vancity is a BC Financial Services Authority authorized credit union and is covered by the Credit Union Deposit Insurance Corporation of British Columbia (CUDIC). To find out more about this coverage, visit the CUDIC website or ask us for more details.

Planet-Wise™ is a trademark of Vancouver City Savings Credit Union.

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