Final answer:
Customers requesting an early withdrawal from a Market Growth GIC must be informed about potential penalties, impact on interest, and how their returns will be calculated. They should also be aware of any administrative fees and how the withdrawal might affect their guaranteed investment. Financial institutions are required to ensure that customers receive all necessary information to make an informed decision.
Step-by-step explanation:
Disclosures for Early Withdrawal of Market Growth GICs
When customers request an early withdrawal from a Market Growth Guaranteed Investment Certificate (GIC), financial institutions are required to provide specific disclosures. These disclosures include the terms related to the early withdrawal such as any applicable penalties, the impact on the interest earned, and the calculation method for the reduced returns. Additionally, customers should be informed of any administrative fees and the process of how the withdrawal will affect the guaranteed aspect of the investment.
The details of these withdrawals are often outlined in the investment agreement at the time of purchase, and customers may also be apprised with a period notice before the actual withdrawal, which varies by institution. It’s important to understand that the market value adjustment could result in receiving less than the principal amount invested if the withdrawal occurs when the market conditions are not favourable.
Customers must receive clear and complete information to make an informed decision regarding the withdrawal of their Market Growth GIC before maturity. By providing transparent disclosures, financial institutions help customers understand the potential financial consequences of their decision.