The best Guaranteed Investment Certificate (GIC) rates or High-Interest Savings Accounts (HISAs) are options for you if you are saving towards a short- to medium-term goal.
For example, say you plan to buy a home 3-5 years from now. You could put your money in the stock markets or a mutual fund; however, that’s a really risky undertaking.
If the financial markets suddenly tank (as they have in recent times), your funds could lose as much as half or more of their value without warning.
GICs and HISAs are relatively safe havens to park your money when you need it to stay intact and earn at least some return. They are also great for investors with low-risk tolerance.
With these financial products, you enjoy peace of mind knowing that your principal is guaranteed and protected up to a specified amount.
Below, we cover some of the best GIC rates in Canada in 2023.
Compare GIC Rates in Canada
The Best GIC Rates in Canada
The list below focuses on the most popular GIC-type, i.e. traditional, non-registered, fixed-rate, non-redeemable GICs. As you can imagine, none of the best rates are offered by big banks. If you want a great GIC rate, your best bet is an online-only bank or credit union.
Canada Deposit Insurance Corporation (CDIC) offers protection to deposits owned by customers of its member firms up to $100,000, while credit unions are insured provincially, and offer protection on up to 100% of your deposits, regardless of the amount.
EQ Bank GIC Rates
EQ Bank is CDIC-insured via its parent bank, Equitable Bank. It is popular for offering one of the best non-promotional High-Interest Savings Account rates (at 2.50%) and GIC packages.
EQ Bank clients have access to a mobile app that enables banking from anywhere, and the minimum deposit for GICs is an industry-low at $100.
Equitable Bank is a member of CDIC, and your deposits are protected for up to $100,000. Get more details in this EQ Bank review.
Here are the current best GIC rates offered by EQ Bank:
- 3 months: 3.25%
- 6 months: 5.00%
- 9 months: 4.80%
- 1 year: 5.75%
- 2 years: 5.55%
- 3 years: 5.35%
- 4 years: 5.10%
- 5 years: 5.10%
Tangerine Bank GIC Rates
Tangerine Bank is CDIC insured via its parent – Scotiabank. Tangerine offers a full suite of banking products, including mortgages, investments, chequing, savings, GICs, loans, and credit cards.
It offers general non-registered GICs (CAD and USD) and GICs for TFSA and RRSP accounts.
Tangerine GIC rates as of this writing include:
- 1-year GIC: 5.95%
- 2-year GIC: 4.20%
- 3-year GIC: 4.00%
- 4-year GIC: 3.90%
- 5-year GIC: 3.85%
Read review: Best Tangerine GICs and Rates
Motive Financial GIC Rates
Motive Financial is CDIC-insured through the Canadian Western Bank. Founded in 1984, Motive Financial is an online-only bank with great HISA and GIC rates. Its current GIC offerings include:
- 1-year GIC: 5.65%
- 2-year GIC: 5.65%
- 3-year GIC: 5.35%
- 4-year GIC: 5.20%
- 5-year GIC: 5.20%
Read Review: Motive Financial
Oaken Financial GIC Rates
When you purchase a GIC from Oaken Financial, you can choose either Home Bank or Home Trust Company as your issuer. Both financial institutions are separate members of CDIC, so you can enjoy separate insurance coverage for your funds.
Its current GIC offerings include:
- 1-year GIC: 5.50%
- 2-year GIC: 5.50%
- 3-year GIC: 5.35%
- 4-year GIC: 5.00%
- 5-year GIC: 5.00%
Read Review: Oaken Financial
Peoples Trust GIC Rates
Founded in 1985, Peoples Trust offers mortgages, credit cards, GICs, and commercial loans. It is CDIC-insured and offers the following GIC rates:
- 1-year GIC: 5.80%
- 2-year GIC: 5.70%
- 3-year GIC: 5.10%
- 4-year GIC: 4.65%
- 5-year GIC: 4.50%
Read Review: Peoples Trust
Achieva Financial GIC Rates
Achieva Financial is operated by Cambrian Credit Union, and deposits are insured by DGCM. It was established in 1998 and offers savings and deposit products in RRSP, RRIF, regular savings, and TFSA accounts. Their current GIC rates are:
- 1-year GIC: 5.30%
- 2-year GIC: 5.35%
- 3-year GIC: 5.10%
- 4-year GIC: 4.90%
- 5-year GIC: 4.90%
Read Review: Achieva Financial
AcceleRate Financial GIC Rates
The parent company for AcceleRate Financial is Access Credit union. Accelerate offers savings and deposit products in non-registered, TFSA, RRSP, and RRIF accounts.
It is insured via DGCM. Current GIC rates being offered include:
- 1-year GIC: 5.20%
- 2-year GIC: 5.25%
- 3-year GIC: 4.85%
- 4-year GIC: 4.60%
- 5-year GIC: 4.70%
Read Review: AcceleRate Financial
Hubert Financial GIC Rates
Hubert Financial is operated by Sunova Credit Union, one of the top 100 credit unions in Canada. Your deposits are insured via Sunova under the Deposit Guarantee Corporation of Manitoba (DGCM).
Its product offerings include savings, TFSA, US$ savings, and investing via VirtualWealth. Current GIC rates include:
- 1-year GIC: 5.20%
- 2-year GIC: 5.25%
- 3-year GIC: 4.85%
- 4-year GIC: 4.60%
- 5-year GIC: 4.70%
Read Review: Hubert Financial
motusbank GIC Rates
motusbank is a digital bank owned by the popular Meridien Credit Union. It offers some of the best savings, GIC, mortgage, and personal loan rates in Canada. Motusbank’s current GIC rates are:
- 1-year GIC: 4.50%
- 2-year GIC: 4.20%
- 3-year GIC: 3.90%
- 4-year GIC: 3.85%
- 5-year GIC: 3.75%
Read Review: motusbank
Ideal Savings GIC Rates
Ideal Savings is owned by Carpathia Credit Union and was launched in 2016. Deposits are insured without limit through Carpathia under DGCM. Its current rates are:
- 1-year GIC: 4.60%
- 2-year GIC: 4.55%
- 3-year GIC: 4.40%
- 4-year GIC: 4.40%
- 5-year GIC: 4.35%
Read Review: Ideal Savings
TD GIC Rates
TD offers several GICs, including Cashable and Non-Cashable GICs, Market-Growth GICs, and USD GICs.
You can choose from GICs with simple or compound interest, as well as registered and non-registered options. Terms are from 30 days to 5 years, and the minimum investment is $500 or $1,000, depending on your chosen GIC.
CIBC GIC Rates
CIBC offers a wide selection of GICs, including registered and non-registered options.
You can choose from Cashable, Escalating-Rate, Market-Linked, Variable-Rate GICs, and more. With a Flexible GIC, you can access your money early. You will also find Bonus Rate GICs with better interest rates.
Terms are from 1 to 5 years, and the minimum investment is from $500 to $2,500.
RBC GIC rates
You will find several options for GICs at RBC, including Guaranteed-Return GICs, Interest Rate-Linked GICs, and Equity Rate-Linked GICs for investments.
There is a wide selection of terms from 30 days to 10 years, and while the minimum investment starts at $500, it is $1,000 or $5,000 for some GICs. There is also a minimum investment of $100,000 for terms under 30 days.
Scotiabank GIC Rates
Scotiabank offers Cashable, Non-Redeemable, Market-Linked, and Personal Redeemable GICs. Several terms are available, depending on the type of GIC.
For example, Long-Term Non-Redeemable GICs have terms from 1 to 5 years, but Short-term Non-Redeemable GICs start at 30 days.
Interest can be compounded annually, semi-annually, or monthly, and these come with different rates. The minimum investment is $500.
BMO GIC Rates
BMO offers a wide range of GICs, including Cashable, Non-Cashable, USD, and Market-Linked GICs, and you can choose from registered and non-registered options. There is even an Air Miles GIC that you can use to earn one Air Mile per month for every $1,000 invested.
The terms for GICs last from 6 months to 10 years, and the minimum investment starts at $1,000 and increases to $5,000 for some GICs.
What is a GIC?
Guaranteed Investment Certificates (GICs) are a type of investment that pays you a guaranteed rate of return over a specified period of time.
They are safe investments and, as such, work well in conservative investment portfolios or can represent some portion of the fixed-income component of any portfolio.
GICs are similar to savings accounts, where you deposit money and are promised an annual interest rate by the bank.
That said, unlike a traditional savings account, a traditional GIC usually locks in your money for the period of time specified in your contract, i.e. your funds are not cashable (or redeemable) until maturity.
For example, a 1-year fixed rate non-redeemable GIC means that if you want to withdraw your funds before 1 year has elapsed, you will pay a penalty.
There are GICs that offer more flexibility and allow you to withdraw your money before maturity. These are known as Cashable or Redeemable GICs. The interest rates offered on these GICs are lower than what is available for a similar non-redeemable GIC and an identical term.
The interest rate on most GICs is fixed. However, there are also options to earn variable interest (variable-rate GICs) or even have the return tied to the performance of the stock market (market-linked GICs).
A GIC can be held in registered (TFSA, RRSP, RESP, RRIF) or non-registered accounts.
For more on the basics of GICs, check out my post on GICs and their place in your investment portfolio.
The advantages and disadvantages of GICs are similar to those of high-interest savings accounts. For more information on their pros and cons, read – The Best High-Interest Savings Accounts in Canada.
Types of GICs in Canada
There are many types of GICs on the market. They have various features, investment terms, and payment options. Examples include:
1. Fixed or Traditional GIC
This is the most common type of GIC available. It’s simple – you invest your funds for a fixed interest rate that is paid at specified periods or at maturity.
2. Cashable or Redeemable GIC
This GIC allows you to withdraw your funds or cancel your contract before the end of your term without penalty.
Cashable GICs are good if you want flexibility for accessing funds should you need to. They may come with a brief lock-in period (e.g. a month) when you cannot cash out.
3. Non-Cashable GIC
Unlike their cashable counterpart, funds are locked in for the duration of your contract. They are also referred to as non-redeemable GICs.
If you want to withdraw funds before a non-cashable or non-redeemable GIC has matured, you will have to pay a penalty fee.
Non-cashable GICs attract a higher return than cashable GICs.
4. Foreign Currency GIC
These GICs are denominated in foreign currency, such as the U.S. dollar (U.S. GIC) and can be used as a vehicle to hold your foreign currencies while earning some interest.
GICs denominated in a currency other than the Canadian dollar are not covered by CDIC insurance.
5. Laddered GIC
This GIC-type allows you to stagger the maturity dates of your investment, such that you can take advantage of higher interest rates and fluctuations while still having access to some of your funds periodically.
For example, say you want to invest $25,000 in a laddered GIC. You can choose to put $5,000 in each of a 1-year, 2-years, 3-years, 4-years, and 5-years GIC.
This way, 20% of your portfolio will mature each year. When your 1-yr GIC matures, you can either cash out, renew it for the same rate, or re-invest for another term with a more attractive interest rate.
Instead of tying down your $25,000 investment in a GIC with one maturity, you ladder it for flexibility and potentially higher return.
GICs come with different terms ranging from a few months to several years.
Popular terms are 6 months, 1 year, 2 years, 3 years, 4 years, and 5 years. Longer terms (up to 10 years) are also available. As mentioned earlier, the longer the term, the higher the interest that is paid.
GICs also come with different interest payment options: Interest may be paid monthly, quarterly, semi-annually, annually, or at maturity.
GIC Investment Options
GICs can come in handy for various investing/savings purposes, including:
A. GIC as Regular Savings
GICs can be used to hold funds that you want to keep liquid while gaining some returns in the meantime. For instance, if you plan on keeping cash in your savings account for 1 year before using it, a 1-yr GIC may offer better returns.
GICs may not be appropriate for an emergency fund if it means you’re penalized for wanting to withdraw your funds before the maturity date.
A high-interest savings account may be more suitable for short-term savings goals and may even offer similar or higher interest rates compared to a GIC, depending on the term length.
B. GIC in Registered Accounts
You can hold GICs in your registered investment accounts, including TFSAs, RRSPs, RDSPs, and RESPs. Depending on what assets you have in your TFSA, it can be tailored to serve as a source of funds for emergency needs.
GICs can fit into most portfolios to account for some of the fixed-income asset allocations.
Pros and Cons of GICs
- Guaranteed savings, so you know your investment won’t decrease.
- You can use GICs in your TFSA, RRSP, and more.
- It’s straightforward to invest in GICs.
- They are a good option for people with a low risk appetite.
- GICs are offered by many banks, with different interest rates and terms available.
- The interest rate may be guaranteed, but it is typically quite low compared to other options.
- Even when you earn interest, you could still lose purchasing power because of inflation.
- GICs are not great for liquidity should you need fast access to your funds.
- They are not the best way to grow your money over the long term, which is where stocks and bonds are more appealing.
GIC vs Bonds
Bonds are where you essentially lend money to the government, and the face value is repaid when it matures, plus interest.
They are considered a safe way to save and provide attractive yields, with better returns over the long term than GICs.
Bonds offer better liquidity because you can exit them quickly, which can make them more appealing if you need access to your funds on short notice.
GICs are more straightforward for most people and may be more convenient as a short-term option. But both are low risk and offer steady returns.
Related: GIC vs Bond
GIC vs Mutual Funds
Mutual funds are also relatively straightforward and are easy for most people to access in Canada. They also offer reasonably low-risk options.
Mutual funds do not guarantee a return like GICs. They consist of a pool of investments, including stocks and bonds, that are managed by a financial advisor. So, you can invest in multiple and diverse assets, lowering your portfolio’s overall risk.
Compared to GICs, mutual funds generally involve management fees and other operating costs, which could make them more expensive.
Mutual funds are more accessible if you need to withdraw funds quickly.
GIC vs HISA
High Interest Savings Accounts (HISAs) provide higher interest rates than standard savings accounts.
You can set one up at your bank or credit union, and they are good for saving for short-term goals where you want more access to your funds than you would get with a GIC.
There may be rules to consider when saving in these accounts, like a maximum withdrawal amount, minimum deposits, and monthly fees. Interest earned in a HISA is taxed at your marginal tax rate, similar to GICs.
GIC vs TFSA
While a GIC is an investment product, a tax-free savings account (TFSA) is a tax-free way to hold funds and investments, and that can include GICs.
Because a TFSA is tax-free, you could choose to invest in a GIC in your TFSA, and it can then count towards the contribution limit, and the interest earned is tax-free.
Related: GIC vs TFSA.
GIC vs RRSP
A registered retirement savings plan (RRSP) is a government-registered account that Canadians can use to save for retirement.
You do not pay tax on RRSP contributions, and instead, you defer it until you withdraw the funds, which is often in retirement.
Again, you can hold a GIC in your RRSP, so you won’t be taxed on interest until you withdraw it. If you want to use a GIC to save for retirement, an RRSP GIC may be a good option.
GIC vs FHSA
The first home savings account (FHSA) allows you to save up tax-free for your home.
With an FHSA, you can contribute up to $40,000 over your lifetime. The qualified investments you can hold in an FHSA are the same as for a TFSA, including GICs.
Doing this gives you another way to enjoy the benefits of a GIC without paying taxes, and it’s especially useful if you are saving up to buy your first home.
Even if you don’t buy a home, you can later transfer FHSA funds to an RRSP, which won’t affect your contribution room.
Related: Best FHSA Investments.
How to Calculate GIC Rates
When opening a GIC account, you will see upfront how much interest you will earn over the term. These are usually fixed, but they can also be variable.
You can also use a GIC calculator online to calculate how much interest you will earn on your investment in dollars.
If the interest is compounded annually, this calculation applies:
- Initial Investment x (Interest Rate+1)Years
So, if you save $10,000 at an Interest rate of 4% for 5 years, the calculation would be:
- $10,000 x ((1.04)(1.04)(1.04)(1.04)(1.04)) = $12,166.53
Minus the initial deposit of $10,000, this leaves you with $2,166.53 in earnings.
How to Choose a GIC in Canada
There are several factors to consider when choosing a GIC in Canada:
- Choose the type of GIC that meets your savings goals and risk appetite. This could be a cashable GIC, redeemable GIC, market-linked GIC, etc.
- Decide whether you want to put it into a registered account like an RRSP or TFSA.
- Choose between a fixed-rate and variable-rate GIC.
- Choose a term that works for you. If you need access to the funds sooner, a shorter term is better, and you could find a term as little as 30 days.
- Compare interest rates and work out how much you will earn.
- Make sure you are aware of the minimum investment, which is usually $500 or more.
- Understand any fees you might have to pay, such as an early withdrawal penalty.
How to Buy a GIC
Purchasing a GIC at your bank or credit union is very easy. Nearly every financial institution offers these, so check with your bank first, but also look around to compare rates.
You can then apply directly online, deposit funds, and start earning.
Are GIC Investments Safe?
GICs are one of the safest investments available for conservative/risk-averse investors.
They are guaranteed by the Canada Deposit Insurance Corporation (CDIC) up to $100,000 (principal + interest) per depositor per eligible financial institution.
As long as you don’t have more than $100,000 in GIC in each of your banks, you should be covered if they become insolvent. GICs purchased through some credit unions and other non-bank financial institutions may be insured through provincial deposit insurance plans.
For example, if you open a GIC at a credit union in Alberta, it’s covered by the Credit Union Deposit Guarantee Corporation (CUDGC). In BC, it’s covered by the Credit Union Deposit Insurance Corporation (CUDIC). Check what is available in your province and how much is covered.
GIC Risk vs. Reward
GICs are also considered safe because your return is usually guaranteed from the start.
If you understand the dynamics between risk and reward, then you know that the higher the potential reward, the higher the risk, and vice-versa.
GICs are low-risk, and as such, the expected return is often significantly lower than “riskier” options like stocks, mutual funds, ETFs, etc.
Persistent low inflation rate numbers and generally lower interest rates mean that GIC numbers stay low. If you lock into a long-term GIC (say 5 years) and interest/inflation rates rise, you could start earning a negative return if the inflation rate exceeds your GIC interest rate.
For the potentially higher rates available through the market or index-linked GICs, your expected return becomes variable, increasing your investment risk.
If a GIC is not held in a tax-sheltered account, e.g. RRSP or TFSA, tax is due on any interest income earned. This income is taxed like your other regular income, using your marginal tax rate.
GIC Interest Income Taxation Example
If you invest $50,000 in a 1-year GIC that pays 1% interest at maturity, you will earn an interest income of $500. If your marginal tax rate is – say 43.75%, it implies that:
- Interest Income Earned: $50,000 x 1% = $500
- Marginal Tax rate: 43.75%
- Tax Payable: $500 x 43.75% = $218.75
- After-Tax Income: $500 – $218.75 = $281.25
- After-Tax Return: $281.25/$50,000 = 0.56%
A measly 0.56% return has been generated after tax.
GIC Rates Canada FAQs
The best GIC rates are always changing as banks vary their rates in relation to the Bank of Canada’s benchmark rate, their in-house prime rate, demand for deposits and loans, economic factors, and other factors. In general, you will find the most competitive GIC rates to be offered by online banks like EQ Bank and credit unions.
GICs are guaranteed investments which means you are guaranteed to get back your principal plus a certain percentage of interest. If inflation exceeds the return you earn on a GIC, you could lose purchasing power. The returns for market-linked GICs are tied to the performance of the benchmark index or security, and your rate of return is not fixed.
GICs are generally safer than stocks, ETFs, and mutual funds. Some of the risks you face include liquidity risk in that you are unable to cash out your money tied in a non-redeemable GIC before maturity without incurring a penalty. Also, the rate of return on your GIC may not keep up with the inflation rate.
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