Market Value Adjustment (MVA)

A Market Value Adjustment (MVA) may apply when you are taking money out of a fixed-term investment before maturity. There can be three components.

  1. term rate adjustment
  2. current rate market adjustment
  3. interest rate penalty

Term Rate Adjustment

This adjustment reflects the length of time you held the investment. For example, suppose you selected a five year term but decide to take the money out after two years. If you'd selected the two year term initially, you'd have earned the two year rate. That's what this adjustment does.

Current Rate Market Adjustment

Interest rates may have changed since the time you made your investment. The lender

If you invest in a 5 year GIC, the firm likely invests in an investment with that term (often called "asset-liability matching"). When you ask for your money back, …

Interest Rate Penalty

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