A Guaranteed Investment Certificate (GIC) can provide tax-free returns for you when you invest inside a TFSA. They are safe investments and provide 100% protection for your principal in all market conditions.
A Tax-Free Savings Account (TFSA) is a government-sponsored account that enables you to save and invest tax-free. The amount of money you can invest in a TFSA is published every year.
The TFSA annual limit in 2022 is $6,000 and if you had been eligible to contribute to a TFSA since its founding in 2009, your accumulated contribution room in 2022 is $81,500.
Monies in a TFSA account can be withdrawn at any time and re-contributed in future years. This is one of the reasons why TFSAs are popular and why GICs work in them so well.
GICs are similar to savings accounts, however, you may be able to generate a higher return using a GIC when you settle for a non-redeemable and long-term GIC. You can read more about the different types of GICs.
Examples of when a GIC works in a TFSA account include situations where you:
- Are saving for a short-to-medium term goal e.g. home down payment, vacation, wedding, car purchase, etc.
- Need to generate a source of regular (steady) fixed income.
- Are risk intolerant, need a very conservative portfolio, or require 100% protection for your principal.
- Require a fixed income component to balance your overall investment portfolio.
Read on to learn about the best TFSA GIC rates in Canada in 2022.
Best TFSA GIC Rates for 2022
I have listed the financial institutions with the best 1-year TFSA GIC rates in Canada below.
All these banks offer GIC rates with terms ranging from 30 days to 5 years and they have low minimum investment balance requirements.
They are also insured, either federally (CDIC) or provincially, and are available across Canada.
As you will notice, the best GIC rates are from online (digital) banks. I also list the best rates the big banks have to offer.
If you are not investing in a TFSA, here are the best regular GIC rates.
1. EQ Bank Tax-Free Savings Account (TFSA) GIC Rates
EQ Bank is the online banking arm of Equitable Bank, a Schedule I bank that has been around for over 40 years. Equitable Bank is CDIC-insured, and this means that your deposits are protected for up to $100,000 per category.
EQ Bank’s GIC rates range from 2.65% to 5.10% for TFSA and RRSP accounts, and there is no minimum deposit required.
- 1-year TFSA GIC rate: 5.10%
Read our EQ Bank TFSA Review.
2. Oaken Financial TFSA GIC Rates
Oaken Financial is an online bank operated by Home Trust. They are CDIC-insured through Home Trust and Home Bank, which means that your deposits are protected by up to $100,000.
Oaken Financial GIC rates range from 4.95% to 5.15% for TFSA and RRSP accounts. The minimum deposit for GIC accounts at Oaken is $1,000.
- 1-year TFSA GIC rate: 5.10%
Read our Oaken Financial Review.
3. Ideal Savings GIC Rates
Ideal Savings is an online bank operated by Carpathia Credit Union.
Your deposits at the financial institution are insured by the Deposit Guarantee Corporation of Manitoba (DGCM) without limit (i.e. 100% regardless of the amount).
Ideal Savings TFSA GIC rates range from 4.55% to 5.05%.
- 1-year TFSA GIC rate: 4.55%
Read this Ideal Savings Review.
4. Outlook Financial GIC Rates
Outlook Financial is the direct banking arm of Assiniboine Credit Union.
They offer GICs with rates ranging from 4.50% to 5.00%. All deposits are insured without limits by DGCM, and you can open a GIC account with as little as $1,000.
- 1-year TFSA GIC rate: 4.50%
Read our Implicitly Financial Review.
5. Achieva Financial GIC Rates
Achieva Financial is another digital bank owned by a credit union, in this case, Cambrian Credit Union.
They offer TFSA GICs with rates from 4.70% to 5.00%. Client deposits are also 100% insured by DGCM.
- 1-year TFSA GIC Rate: 4.70%
Read this Achieva Financial Review.
6. Peoples Bank GIC Rates
People’s Bank Company is a CDIC-insured trust company based in Vancouver and also has offices in Calgary and Toronto. People’s Group was established in 1985.
They offer 1-5 year term TFSA GICs with rates from 5.00% to 5.10%. The minimum deposit to open an account is $1,000.
- 1-year term TFSA GIC: 5.10%
Read this People’s Bank Review.
7. motusbank GIC Rates
motusbank is a new online bank operated by Meridian Credit Union. motusbank is a member of CDIC, so GIC deposits are insured for up to $100,000.
Their TFSA GIC rates go from 4.95% (2 years) to 5.30% (5 years).
- 1-year TFSA GIC: 4.95%
Read this review of motusbank.
8. Tangerine GIC Rates
Tangerine Bank is Canada’s most popular online bank. It is a fully-owned subsidiary of Scotiabank and is CDIC-insured.
Their TFSA GIC rates range from 1.50% to 5.00%, and there is no minimum deposit.
- 1-year TFSA GIC rate: 4.85%
Read our complete Tangerine review.
9. Simplii Financial GIC Rates
Simplii Financial is the direct banking arm of CIBC and is insured by the Canada Deposit Insurance Corporation.
Their TFSA GIC rates range from 4.05% to 4.50%, and you can start investing with as little as $100.
- 1-year TFSA GIC rate: 4.50%
Read our Simplii Financial review.
TFSA GIC Rates Offered By Big Banks
Here are some of the GIC rates offered by the five biggest banks in Canada. They are all CDIC-insured.
10. RBC GIC Rates
The Royal Bank of Canada offers a variety of GIC investments for registered and non-registered accounts.
Their annually compounding GICs for TFSAs and RRSPs offer rates from 3.000% (1 year) to 4.750% (10 years). The minimum deposit is $500.
- 1-year TFSA GIC rate: 3.000%
11. CIBC GIC Rates
CIBC offers a variety of TFSA GIC products. Their non-redeemable TFSA GIC rates range from 4.150% to 4.350%.
The minimum deposit amount to open a GIC account is $1,000.
- 1-year TFSA GIC rate: 4.150%
12. Scotiabank GIC Rates
Scotiabank’s GIC rates range from 2.0000% to 3.2500% for non-redeemable GICs (compounded annually). The minimum deposit is $500.
- 1-year TFSA GIC rate: 2.0000%
13. BMO GIC Rates
Bank of Montreal is one of the largest banks in Canada. Their GIC rates range from 4.250% to 5.000% for 1-10 year terms.
The minimum investment amount is $1,000.
- 1-year TFSA GIC rate: 4.250% (annual compound)
14. TD GIC Rates
They offer GIC products for TFSA, RRSP, RRIF, and RESP accounts.
TD’s TFSA GIC rates range from 3.75% to 4.65% for 1-5 year terms. The minimum investment amount is $500.
- 1-year TFSA GIC rate: 4.65%
- Wealthsimple TFSA Case Study: Invest For Retirement
- 5 Ways To Invest in your TFSA
- TFSA Withdrawal Rules
- TFSA Beneficiary vs Successor Holder
- TFSA vs Savings Account
- EQ Bank TFSA Account Review
What is a GIC?
A GIC is a deposit product that pays you a specific rate of return in exchange for keeping your money invested for a predefined period of time.
GICs are safe investments, and both your principal and interest payments are guaranteed. A GIC term may range from 30 days to as long as 10 years.
GICs can be held in a TFSA, RRSP, RRIF, RESP, or non-registered personal and corporate accounts.
Types of GIC products available in Canada include:
- Non-redeemable GICs
- Cashable or redeemable GICs
- Market-linked GICs
- Fixed-rate GICs, and
- Variable-rate GICs
Are GICs Safe? CDIC Insurance vs Provincial Insurance
When you buy a GIC, the principal is guaranteed, and you also get a specific rate of return (this does not apply to some products e.g. market-linked GICs).
The bank/financial institution where you keep your GIC deposits may be insured federally (via CDIC) or provincially.
Canada Deposit Insurance Corporation (CDIC) is a federal crown corporation. It protects eligible deposits up to a limit of $100,000 per category (including GICs) against loss in the event that a financial institution becomes insolvent. For this insurance coverage to apply, the bank/credit union must be a CDIC member.
Provincially-regulated credit unions also offer deposit insurance coverage via various provincial insurers. The level of coverage provided varies from a maximum limit of $100,000 in Quebec to an unlimited amount in Alberta, Manitoba, British Columbia, and Saskatchewan.
In some provinces, registered accounts are covered 100% while there is a limit for non-registered deposits (e.g. Ontario and PEI).
Following changes to CDIC coverage in 2021, there is now protection for GIC terms exceeding beyond 5 years, foreign currency deposits, and expanded coverage for RESPs and RDSPs.
Benefits of GICs
GICs are a very flexible investment asset for registered and non-registered investment accounts.
You can vary the term of your GIC to match up with when you need funds, with available terms ranging from 30 days to 10 years.
GICs are safe and if you cannot afford to lose your principal investment, a GIC is close to being a risk-free investment.
Investors who need a stream of income at specific times of the year can purchase a GIC ladder that has various maturities. You can re-invest matured GICs if you don’t need the income and if interest rates are favourable.