Guaranteed Daily Interest Account (GDIA)

The current annual yield is 5.10% (as of November 24, 2023- subject to change). The rate is reviewed on an ongoing basis and could change frequently based on market and competitive conditions.

The credited interest will be calculated as a base rate plus an enhancement. The enhancement is negotiated on a client specific basis. There is no specific benchmark for this fund, as it represents assets held at the member level, held in Sun Life’s general account (not a segregated fund). For illustrative purposes, we can compare the Guaranteed Daily Interest Account against the Sun Life Money Market fund and the 91 day Treasury Bill (which can be used as a benchmark by money market funds).

Interest on the Guaranteed Daily Interest Account is calculated and accrued daily based on a daily compounding interest factor that assumes a 365-day year. That is, the daily interest factor = (1+i)1/365, where i = annual interest rate applicable for that day.

Like money market funds, the main risk that clients would be exposed to in the account would be credit risk, but the level of exposure is low. This is because Sun Life guarantees investors’ principal and credited interest in the GDIA, and Sun Life fully bears the risk of the underlying investment performance. As such, investors in the GDIA would only suffer credit losses if Sun Life were to default. This is a low risk event as Sun Life Assurance Company of Canada has a financial strength rating of AA- (or equivalent) from most rating agencies. Even in the unlikely event that Sun Life defaults on its obligations, members are eligible for coverage under Assuris for up to $100,000 each.

Investors in money market funds are not eligible for coverage under Assuris or CDIC. Depending on fees, net returns in a money market fund can be negative, whereas returns for the Guaranteed Daily Interest Account cannot be negative.

The GDIA is governed by Sun Life’s robust investment and risk management practices. Money deposited in the GDIA would be backed with investment grade fixed income securities. This can include fixed income assets that traditional money market funds may not invest in to generate additional yield. Given the GDIA is a general account fund, the exact details of our underlying investments are proprietary and confidential.