The guaranteed contract is the agreement that assures the repayment of the capital amount and the rate of interest for a fixed amount of time. And these contracts are specially issued by the life insurance companies and those are eligible for the favorable tax position under the plans and codes. The Guaranteed Investment Contracts are primarily used as the medium that brings higher returns than a normal saving account or any kind of securities and these are used for static value funds.
10+ Guaranteed Investment Contract in PDF | DOC
1. Traditional Guaranteed Investment Contract
2. Synthetic Guaranteed Investment Contract
3. Keybank EB Managed Guaranteed Investment Contract Fund
4. Fare Value Guaranteed Investment Contract
5. Separate Account Guaranteed Investment Contract
6. Municipal Guaranteed Investment Contract
7. Guarantee for Equity Investment Contract
8. Sample Guaranteed Investment Contract
9. Guaranteed Investment Contract Fund
10. Prudential Guaranteed Investment Contract
11. Annuity Guaranteed Investment Contract
What are the Steps to create the Guaranteed Investment Contract?
What is the Guaranteed Investment Contract and how it works?
The guaranteed investment contract is the contract or agreement establishing the relationship between the contract purchaser and the insurance organization where the company provides the guaranteed rate of return in lieu of keeping the deposits for the fixed time period. It appeals to investors as the alternatives for the saving accounts. And these agreements and contracts are referred to as the funding agreement.
Here we can assume that a particular company buys the investment contract from an insurance company on behalf of the workers being enrolled in the company’s pension plan. The insurance company assures the maximum return of the company’s actual investment and pays either a fixed or the variable interest rate until the contract ends. The Guaranteed Investment Contract is the conservative and static investment and maturity time is usually short in nature.
The value of the investment contract can also be affected by inflation and deflation. And it is the type of pension plan funding equipment and is an alternative to trust-fund plans, different investment accounts, and such guarantee contracts. It also provides the guarantee for interest rates and saves the principal against the loss.
The Guaranteed Investment Contracts are known by the various names and so you shouldn’t get confused even if you encounter any of the following terms- a guaranteed fund, a fixed-income fund, the capital preservation amount and the fixed amount. These terms refer to the same type of investment contract and agreement. These investments are safe and secured as the price remains stable and is not a victim of sudden fluctuations.
What is the importance of Guaranteed Investment Contracts?
The Guaranteed Investment Contracts are referred to be a safe investment because they lock in the specific interest rate for the number of the years and are not affected by the market or economic fluctuations even with the falling stock market. They save the principal amount from the severe loss.
And with the Guaranteed Investment Contracts you may not reap off the advantages of the favorable situation of the market but nevertheless earnings are proper than that of the Certificate of Deposits (CDs). And these contracts are like CDs with the major difference which they can purchase from the insurance company and not from the bank.
And this is the investment-oriented product put forward by the insurance companies. And the interest rates are higher than any other bank rate of interest. The investment contracts are an effective source of the investments that give higher returns even in the short term. The Guaranteed Investment Contracts are typically sold by the pension plan sponsors as the pension investment with a maturity period starting from one to 20 years.
Therefore, the investment contracts give the assurance of providing the actual or the fixed amount to the investor and it doesn’t fluctuate with the time and the market situation.