I've seen ads for equity or market linked GICs (Canadian term for CDs). Here's a link to one example:
http://www.rbcroyalbank.com/products/gic/marketsmart-cnd-utilities.htmlA guaranteed return of 5.25% on the 5 year product with potential for more seems like a pretty good deal, especially given it's much higher than any other gauranteed rate and the stock markets of the USA and Canada are generally accepted to be over-valued right now, making a guaranteed return even more attractive.
I get that you stand to make more by investing in index funds if the indexes rise and that early cancellation fees are hefty (but they often are for GICs anyway), but I can't see how these aren't a pretty good idea as a medium-term investment if you are
sure that you won't need to access the funds before the 5 years is up. However, every source I find online says not to buy them, but that seems more directed to the funds where it is just your principal that is guaranteed, not your principal plus a rate of return.
What am I missing?