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Want to get an idea of the approximate current value of your RBC® Equity-Linked GICDisclaimer1? Try the RBC Equity-Linked GICs Return Calculator. While, the actual return cannot be calculated prior to the maturity of your RBC Equity-Linked GIC and will likely differ from the return as provided by the calculator, this tool can give you an approximate idea of your equity-linked GIC's likely performance.
RBC U.S. MarketSmart GIC (S&P 500 Index Linked)
Legend:
For Indication Purposes Only
Summary
Based on the purchase date of January 22, 2021, your estimated variable rate of return is: 1.50%Disclaimer2 (for indicative purposes only). Note that the Current Index Level used in this calculation is based on the average of the latest month-end reference index values (up to a maximum of 12 months).
Based on the purchase date of January 22, 2021, your GIC will mature on approximately January 22, 2023.
For indication purposes only, the variable rate of return is: 1.50%Disclaimer2.
Current value of investment
$101,500.00
Original investment
$101,500.00
0.15%
50%
0.15%
101500.00
50%
101500.00
50%
50%
50%
50%
Attention: Important Notice
- Effective September 25, 2021, the early Return Lock-in feature will no longer be available for new purchases of our Canadian Market-Linked GIC.
- The actual return at maturity may differ, as the calculation will be based on the average of the final 12 month-end index closing levels prior to your maturity.
If you exercise the early lock-in optionDisclaimer3 (for Market-Linked GICs - Unlimited Return Potential only):
- You must advise the branch by the early lock-in date.
- The actual return on early lock-in date may differ.
- The return is paid out on the early lock-in date, but your principal investment is retained until maturity.
Note: This calculator should not be used to provide an indication of the lock-in returnDisclaimer3
The RBC Equity-Linked GICs Return Calculator ("Calculator") provides an approximate current value of your RBC equity-linked GIC based in part on the accuracy and completeness of the information you have provided. The approximate current value is provided for illustrative and general information purposes only, and is not intended to provide specific financial or other advice, and should not be relied upon in that regard. Royal Bank of Canada does not make any express or implied warranties or representations with respect to any information or results in connection with the Calculator and will not be liable for any losses or damages arising from any errors or omissions in any information or results, or any action or decision you make in reliance on any information or results.
The chart above shows the daily average of share prices for the 20 stocks in the RBC North American MarketSmart GIC basket.
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Questions about your GIC? Let's talk by phone or in person at your nearest RBC Royal Bank® branch. You can also check out the personal (opens new window) or business (opens new window) GIC pages of our website for more details.
Call 1-800-463-3863
- Index Base Level from the date of purchase (as indicated on your GIC Investment Confirmation, if applicable)
- Participation Factor or minimum and maximum rates (as indicated on your GIC Investment Confirmation, if applicable)
- Latest applicable index value.
Attention
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RBC Equity-Linked GICs - How returns are calculated
RBC MarketSmart GICs linked to an index - Guaranteed Minimum Return
Factors to be considered for the variable return payment calculation:
- Index Settlement Level (ISL): is the closing level for the equity index linked to your deposit, for the business day preceding the maturity date
- Index Base Level (IBL): is the closing level for the equity index linked to your deposit, on the business day following the investment date
- "Maximum Return" means the maximum return, expressed as a percentage rate per term, that we set for a Variable Return on the investment date
- "Minimum Return" means the minimum return, expressed as a percentage rate per term, that we set for a Variable Return on the investment date
Formula used to calculate your variable return payment:
Principal x (ISL - IBL) / IBL
To calculate your variable return payment, multiply the principal by the variable return. If the variable return is below the minimum return, adjust it upwards to the minimum return set out at the time of purchase. If the variable return is above the maximum return, adjust it downwards to the maximum return set at the time of purchase.
For example, let's say you invest $10,000 in a 3-year GIC with a Participation Factor of 60% and a Base Level of 1,000. If after three years, the Index Settlement Level is 1,300, then your variable return payment would be calculated as:
Index return = ((1,400 - 1,000) / 1,000) = 40%
This is above the maximum rate, so your variable return would be adjusted down to the maximum return set at the time of purchase of 25% Variable return payment = $10,000 x 25% = $2,500. At maturity, you would receive your original principal of $10,000 plus the variable return payment of $2,500, for a total of $12,500.
Using this same example, if after five years, the Index Settlement Level drops to 865 instead, the index would have returned -13.5%. This is below the minimum rate set out at the time of purchase and your calculated variable return payment would be $10,000 x 5% = $500, and at maturity you would receive $10,500. If the index performs negatively or beneath the minimum return your variable return will always be at least at the minimum return and your principal will be fully guaranteed.
Again using this same example there is one other scenario that could arise. If the Index Settlement Level was at 1200, the index would have returned 20%. This is between the minimum and maximum returns, so no adjustment is necessary and this would be the return on your GIC. Your variable return payment would be $2,000 and at maturity you would receive $12,000.
RBC MarketSmart GICs linked to a basket of stocks - Guaranteed Minimum Return
The calculation of your return will be based on the following variables:
- Base Price (BP): The closing share price of each of the 20 companies on the first business day after the GIC issue date.
- Settlement Price (SP): The closing share price of each of the 20 companies on the business day preceding the maturity date.
The formula used to calculate your return is the average of the percentage change in the share price of each of the underlying companies in the basket:
Principal x Average of the "Percentage Change" for each of the companies in the basket, where
Percentage Change = (SP - BP) / BP
To calculate the variable return payment you would receive on your principal at the end of your GIC's term, multiply the principal by the Variable Return. If the variable return is below the minimum return, adjust it upwards to the minimum return set out at the time of purchase. If the variable return is above the maximum return, adjust it downwards to the maximum return set at the time of purchase.
For example, let's say you invest $10,000 in a 5-year MarketSmart GIC that is linked to a basket of 5 stocks, with a minimum return of 3%, a maximum return of 15%. Your variable return would be calculated by applying the "Percentage Change = (SP - BP) / BP" formula to each of the 5 share prices in the table below, and then taking an average of this percentage change for all of the 5 stocks. This would result in a variable return of 17.34% as shown in the table below:
| Company | Base Price (BP) | Settlement Price (SP) | Percentage Change |
|---|---|---|---|
| Stock 1 | $115.95 | $138.23 | 19.22% |
| Stock 2 | $82.69 | $98.32 | 18.90% |
| Stock 3 | $77.48 | $90.26 | 16.49% |
| Stock 4 | $113.69 | $130.47 | 14.76% |
| Stock 5 | $124.29 | $145.8 | 17.31% |
| Variable Return (Avg. Percentage Change) | 17.34% | ||
Since this return is above the maximum rate, your variable return would be adjusted downwards to the maximum return of 15% set at the time of purchase. As such, your variable return payment = $10,000 x 15% = $1,500. At maturity, you would receive your original principal of $10,000 plus the variable return payment of $1,500, for a total of $11,500.
The same logic would apply if the share prices of the companies within the basket drop. If they drop aggressively, your average percentage change on the basket may end up being below the minimum guaranteed rate as demonstrated in the table below:
| Company | Base Price | Settlement Price | Percentage Change |
|---|---|---|---|
| Stock 1 | $115.95 | $110.45 | -4.74% |
| Stock 2 | $82.69 | $81.65 | -1.26% |
| Stock 3 | $77.48 | $73.54 | -5.09% |
| Stock 4 | $113.69 | $109.35 | -3.82% |
| Stock 5 | $124.29 | $118.54 | -4.63% |
| Variable Return (Avg. Percentage Change) | -3.91% | ||
In this case, your variable return would be adjusted upwards to the guaranteed minimum rate of 3% set out at the time of purchase. As such, your variable return payment = $10,000 x 3% = $300. At maturity, you would receive your original principal of $10,000 plus the variable return payment of $300, for a total of $10,300.
Lastly, a 'mildly positive' scenario is also possible, where the share prices of the companies within the basket increase, but not significantly. As shown in the table below, if the share prices experience a modest increase over the term of your GIC, your average percentage change on the basket could fall between the minimum guaranteed rate and the maximum rate.
| Company | Base Price | Settlement Price | Percentage Change |
|---|---|---|---|
| Stock 1 | $115.95 | $124.72 | 7.56% |
| Stock 2 | $82.69 | $89.57 | 8.32% |
| Stock 3 | $77.48 | $83.54 | 7.82% |
| Stock 4 | $113.69 | $123.50 | 8.63% |
| Stock 5 | $124.29 | $130.94 | 5.35% |
| Variable Return (Avg. Percentage Change) | 7.54% | ||
In this case, no adjustment to the variable return would be required (as done in the previous 2 examples) and you will receive the entire 7.54% as calculated in the table above. Your variable return payment = $10,000 x 7.54% = $754. At maturity, you would receive your original principal of $10,000 plus the variable return payment of $754, for a total of $10,754.
RBC Market-Linked GICs - Unlimited Return Potential
The calculations for your return are based on three factors:
- Index Settlement Level (ISL): is based on the average month-end closing value of the index or fund for the 12 months prior to maturity.
- Index Base Level (IBL): the closing value of the index on the first business day after the GIC issue date.
- Participation Factor (PF): the percentage at which the GIC will participate in the returns of the index or fund; it is set at the time of purchase and depends on market conditions.
The following formula is used to calculate your variable return payment:
Principal x (ISL - IBL) / IBL x PF
For example, let's say you invest $10,000 in a 3-year GIC with a Participation Factor of 60% and a Base Level of 1,000. If after three years, the Index Settlement Level is 1,300, then your variable return payment would be calculated as:
At maturity, you would receive your original principal of $10,000 plus the variable return payment of $1,800, for a total of $11,800. The better the index performs, the higher the Settlement Level will rise and the higher your return will be.
Using this same example, if after three years, the Index Settlement Level drops to 865 instead, your calculated variable return payment would be -$810 x ($10,000 x [(865 - 1,000)/1,000] x 60%). In this scenario, your variable return would be set to zero. Therefore, if the index performs negatively and the Index Settlement Level decreases below the Index Base Level, you will not earn any return, but your principal will be fully guaranteed.
In addition to the Index Settlement Level, your variable return is also affected by the Participation Factor, which is set at the time of purchase by RBC and is dependent on market conditions. Within a non-registered account, the variable return payment is taxed as interest income.