Most financial institutions offer GICs, but they all come at different rates. When searching for a GIC, it’s important to do your research. With so many different rates to choose from, you want to be sure you’re getting the best one.
What are GICs?
The simplest way to describe a GIC is that it’s a loan to a financial institution structured like a term deposit. Your money is invested at a guaranteed rate for a predetermined period. Once the term of the GIC is over, you’ll receive your initial deposit back along with the interest you earned. The type of GIC that you choose will determine whether you earn using fixed-rate GICs or variable-rate GICs. With a fixed rate, you’ll know exactly how much interest is calculated since these are a form of fixed-income securities.
What makes GICs different from other forms of investing is that deposits up to $100,000 are covered by the CDIC (Canada Deposit Insurance Corporation). Stocks and other forms of investments aren’t covered.
What Influences Them?
Like other interest rates in Canada, GIC rates are influenced by the Bank of Canada’s Prime Rate (the policy interest rate). When the Bank of Canada increases its policy interest rate, GIC rates will increase. Still, they will also decrease as prime rates fall, since this directly affects the financial institution’s prime rate. These rates are evaluated about 8 times per year so that they can change frequently. However, the rate you lock in will stay that rate for your entire term, unless you opt for a variable rate.
Another thing that will influence your rate is the specifics of the GIC. This means that whether the GIC is redeemable or non-redeemable, the term length, and the financial institution holding the GIC will all influence the rate. This is because GICs are a competitive market, so that financial institutions will compete for your business.
Bonds Vs GICs
While Bonds and GICs are similar, they also have some specific characteristics that differentiate them. The first is that GICs are guaranteed investments with a specific term requirement. Bonds can be bought and sold at any time, even before they mature.
Another difference that you have to account for is the interest rates. As interest rates rise, GIC rates rise as well. With bonds, the price falls when interest rates rise. This would mean that you would incur a gain with a GIC and a loss with a bond if you sold during this time.
The main similarity between bonds and GICs is that they’re both technically considered financial loans. While GICs are loaned to financial institutions, funds from bonds are loaned to the company from which you purchased the bond.
GICs: Are They Risky or Safe?
Compared to other forms of investing, GICs are actually considered to be very safe since you earn guaranteed interest, which is known as maturity interest on GIC investments. While you do incur some risk with market-linked GICs, the standard term GIC has almost no risk at all. The only risk is if the bank goes under, and even then, you’re covered for up to $100,000 with CDIC insurance.
However, when you put your funds into a GIC, remember that it’s not a savings account, and you can’t withdraw funds whenever you choose. In fact, there may be a penalty for withdrawing early, or you may not be able to withdraw early at all. It depends on the type of GIC and the frequency of investment payments.
Best GIC Rates by Major Banks
While pretty much every financial institution offers some form of GIC, the rates are pretty competitive. Let’s take a look at some of these GIC interest rates with major banks and how they work.
BMO
Like most financial institutions, BMO offers a wide variety of GIC rates. One of their most popular GIC terms is the 12-month BMO GIC. Since this term is only one year, it offers a great rate for a short period. It’s 100% principal-protected and is eligible for CDIC Insurance. However, if you’re looking for a longer-term investment with the same level of protection, a good option is the 5-Year BMO GIC at 3.100%.
If you’re looking for a riskier, market-linked investment, then there’s the BMO Blue Chip GIC. This can earn you up to 40.0% based on the market. However, your principal investment is 100% guaranteed, and there’s a guaranteed minimum rate of return of 2.50% after 5 years.
These are just the featured and more popular GICs; there are a bunch more with different terms and rates. However, these are non-cashable GICs and can’t be cashed out before the term ends. The term end date is based on your purchase date, and the interest payment options for your annual rate are based on BMO’s policy.
| Term with $1,000 or More Invested | Annual Interest Rate |
| 1 Year | 2.700% |
| 18 Months | 2.850% |
| 19 Months | 2.850% |
| 2 years | 2.750% |
| 3 Years | 2.850% |
| 4 Years | 3.000% |
| 5 Years | 3.100% |
| 6 Years | 3.250% |
| 7 Years | 3.300% |
| 10 Years | 3.350% |
TD
TD also offers a wide variety of GICs and GIC rates. Currently, they have a 100-Day TD Special Offer GIC that will automatically renew after 100 days. The current rate for this GIC is 1.80%, and the minimum investment amount is $1,000. This GIC is cashable after 30 days; however, the minimum cashable amount is $1,000, with $1,000 remaining in the GIC.
Another special offer is the TD Special Offer GICs, which are non-cashable. There’s an 18-month term at 2.90% and a 3-year term at 20%. The minimum deposit is between $500 and $ 1,000, depending on the account. This one also has the auto-renewal option.
If you’re searching for a longer-term GIC, there’s the TD 3-Year Premium Rate Cashable GIC. You can redeem this account early; however, redemptions before 91 days pay no interest. There’s a minimum redemption amount of $1,000 and a minimum remaining balance of $1,000. The minimum investment amount is $500 or $1,000, depending on the account that you choose.
Here’s a look at some of the other rates that TD offers.
| Type of GIC and Term | Interest Rate |
| 1 Year Cashable GIC | 1.75% |
| 5 Year Stepper Year 1 | 0.50% |
| 5 Year Stepper Year 2 | 0.65% |
| 5 Year Stepper Year 3 | 0.85% |
| 5 Year Stepper Year 4 | 1.15% |
| 5 Year Stepper Year 5 | 1.25% |
| Short-Term Cashable GIC 1-29 days | 0.10% |
| 1 Year Wait and See GIC | 1.75% |
RBC
RBC offers three different types of GICs: Guaranteed Return GICs, Interest-Linked GICs, and Equity-Linked GICs. They also currently have some special-rate GICs. There’s a 1-year cashable GIC at 2.15%, a 1-year non-redeemable GIC at 2.80%, a 2-year non-redeemable GIC at 2.80%, and a 5-year non-redeemable GIC at 3.10%.
Here’s a look at some other RBC GIC rates.
Guaranteed Return GICs
With this type of GIC, the minimum investment amount depends on the type of account you’re investing in and when you invest. It ranges from $500 to $100,000. The terms range anywhere from 1 day to 10 years. All terms less than one year are payable at maturity, and terms greater than one year may be paid at maturity, monthly, semi-annually, or annually. Both your principal investment and interest are guaranteed.
| Term | Type and Rate | Type and Rate |
| 30 -59 Days | Non-redeemable – 2.150% | Redeemable – 1.900% |
| 60 – 89 Days | Non-redeemable – 2.350% | Redeemable – 2.100% |
| 90 – 179 Days | Non-redeemable – 2.400% | Redeemable – 2.150% |
| 180 – 269 Days | Non-redeemable – 2.400% | Redeemable – 2.150% |
| 270 – 264 Days | Non-redeemable – 2.400% | Redeemable – 2.150% |
| 264 – 365 Days | Non-redeemable – 2.400% | Redeemable – 2.250% |
| 1 Year | Non-redeemable – 2.450% | Redeemable – 2.350% |
| 1.5 Years | Non-redeemable – 2.500% | Redeemable – 2.400% |
| 2 Years | Non-redeemable – 2.650% | Redeemable – 2.450% |
| 3 Years | Non-redeemable – 2.550% | Redeemable – 2.450% |
| 4 Years | Non-redeemable – 2.700% | Redeemable – 2.600% |
| 5 Years | Non-redeemable – 2.750% | Redeemable – 2.650% |
| 7 Years | Non-redeemable – 3.000% | Redeemable – 2.900% |
| 10 years | Non-redeemable – 3.000% | Redeemable – 2.900% |
They also have a few more special rates you can ask about if you choose to get a GIC with RBC.
Interest-Rate Linked GICs
These types of GICs guarantee your principal but have a variable interest rate rather than a fixed one. This variable interest rate is linked to any changes in the RBC’s Prime Rate, which is affected by the BOC’s Prime Rate.
| Term | Rate |
| 1 Year Term to Maturity | 2.000% – 2.450% (based on amount invested) |
| 1 Year Term to Maturity | 1.900% – 2.350% (based on amount invested) |
Equity Linked GICs
These types of GICs offer a guaranteed investment, but allow you the flexibility of earning more by having a stake in the market. Here’s a look at the rates.
| Type and Term | Minimum Return Rate | Maximum Return Rate |
| RBC US MarketSmart GIC 2 years | 1.25% | 6.00% |
| RBC US MarketSmart GIC 3 Years | 1.50% | 11.00% |
| RBC US MarketSmart GIC 5 Years | 5.00% | 20.00% |
| RBC Canadian Banking MarketSmart GIC 2 Years | 1.75% | 10.0% |
| RBC Canadian Banking MarketSmart GIC 3 years | 3.00% | 17.00% |
| RBC Canadian Banking MarketSmart GIC 5 Years | 8.00% | 30.00% |
| RBC Canadian Utilities MarketSmart GIC 2 Years | 2.00% | 10.00% |
| RBC Canadian Utilities MarketSmart GIC 3 Years | 2.50% | 20.00% |
| RBC Canadian Utilities MarketSmart GIC 5 Years | 8.00% | 30.00% |
| RBC North American MarketSmart GIC 2 Years | 1.50% | 10.00% |
| RBC North American MarketSmart GIC 3 Years | 2.50% | 17.00% |
| RBC North American MarketSmart GIC 5 Years | 7.00% | 30.00% |
| RBC Canadian Market-Linked GIC | 80% Participation Factor | —– |
| RBC ESG Market-Linked GIC 4 Years | 100% Participation Factor | —– |
| RBC ESG Market-Linked GIC 6 Years | 100% Participation Factor | —— |
CIBC
CIBC is another bank that offers a variety of GICs. That said, they currently have 5 GICs with promotional rates. Let’s take a look at those.
CIBC Variable Rate GIC
This is a one-year GIC with a minimum investment amount of $1,000. It has a posted rate of 1.75%. This is also a cashable GIC, but the interest rate is linked to CIBC’s prime rate, meaning it can fluctuate throughout the term.
Since this is a cashable GIC, you can cash out at any time. However, you will not be paid any interest if you cash out within the first 29 days. After that, you’ll be paid interest up until the day you withdraw. If you leave it until maturity, you can have it automatically renewed.
CIBC Bonus Rate GIC – 1 Year
For the one-year term bonus rate, you can get 2.7%, and the term ranges from 1 to 5 years. Since this is a non-redeemable GIC, you only earn interest paid at maturity of the investment. You can also choose to automatically renew once the term is up and you’ve received your interest payment.
CIBC Bonus Rate TFSA GIC
These rates are based on the term that you choose. They range from 2.70% in 1 year to 3.10% in 5 years. This GIC is also non-redeemable, so no interest is available until maturity. You can also choose to automatically renew at maturity. If you choose to transfer to another institution before the term ends, you won’t receive any interest and will be charged a $100 fee.
CIBC Bonus Rate GIC – 2 Year
With the 2 Year Bonus Rate GIC, you can get 2.75%. However, you can go up to 5 years, which is 3.10%. This is also non-redeemable, and interest is payable upon maturity.
CIBC Bonus Rate RRSP GIC
If you want to invest this into an RRSP, the minimum investment amount is $500. You can get them at 1 year (2.70%), 2 years (2.75%), and 5 years (3.10%). If you choose to transfer before the term is up, there will be a $100 fee, and interest won’t be paid, as it is only paid at maturity.
Scotiabank
Scotiabank also has some great GIC options. Currently, you can get a 24-month personal redeemable GIC at 2.55% and a 2-year non-redeemable GIC at 3.25%.
Here are some other rates you can get with Scotiabank.
Long-Term Non-Redeemable GICs
| Term | Compounded Annually | Compounded Semi-Annually | Paid Monthly |
| 1 Year | 2.4500% | 2.3700% | 2.350% |
| 18 Months | 2.5000% | – | – |
| 2 Years | 2.5000% | 2.4200% | 2.4000% |
| 3 Years | 2.6000% | 2.5200% | 2.5000% |
| 4 Years | 2.7000% | 2.6200% | 2.6000% |
| 5 Years | 2.7500% | 2.6700% | 2.6500% |
Short -Non-Redeemable GICs
| Term | Rate |
| 30 – 59 Days | 2.0000% |
| 60 – 89 Days | 2.0000% |
| 90 – 119 Days | 2.2000% |
| 120-149 Days | 2.2000% |
| 150-179 Days | 2.2000% |
| 180-269 Days | 2.300% |
| 270-364 Days | 2.400% |
You can also get a cashable GIC at 1.90% or a market-linked GIC with a minimum guaranteed rate of 0.33% and a maximum rate of 41%, since these rates are subject to change.
Tangerine
Even though Tangerine isn’t a traditional bank, it still offers registered and non-registered GICs. Their rates are also based on how long you invest the funds. Let’s take a look.
| Term | Rate |
| 90 Days | 2.50% |
| 180 Days | 2.75% |
| 270 Days | 3.00% |
| 1 Year | 3.25% |
| 1.5 Years | 3.35% |
| 2 Years | 3.55% |
| 3 Years | 3.65% |
| 4 Years | 3.75% |
| 5 Years | 3.80% |
Coast Capital Savings
One of the largest credit unions in Canada is Coast Capital Savings. With a GIC from Coast Capital Savings, the minimum deposit is only $500; you can choose a registered or non-registered plan; the term ranges from 30 days to 7 years; and your initial investment is guaranteed. Here’s a look at some of their GICs.
| GIC | Rate | Description |
| 18-Month Non-Redeemable GIC | 3.10% | You can’t redeem this GIC before maturity, and you only need a $500 minimum deposit. |
| 1 Year Better Than Cash GIC | 2.30% | This GIC is redeemable after 6 months with no penalty on the interest paid. The minimum deposit is only $500. |
| 1 Year Non-Redeemable GIC | 2.90% | You’re unable to redeem this GIC before it hits maturity. The minimum deposit required is only $500. |
| 16 Month Flex GIC | 0.80% (1-8 Months)4.25% (9-16 Months) | This particular GIC is redeemable with Interest after 30 days. You also only need $500 to get started. |
| 3-Year Non-Redeemable GIC | 3.50% | You can’t redeem this GIC until it reaches maturity. The minimum deposit amount is also $500. |
| Market-Linked GIC | – | With this GIC, your principal investment is protected, and the interest is compounded annually. There are no commissions or management fees, and it’s non-redeemable until maturity. |
| Rise Rate GIC | 2.60% – Year 1, 2.70% – Year 2, 3.10% – Year 3 | With this GIC, you have a choice of earning compound or annual interest. There’s also a minimum deposit of $500. |
EQ Bank
When it comes to GICs with EQ Bank, it’s important to note that all deposits are CDIC-eligible, and the minimum deposit is $100. The GIC you choose will determine your rate. Here are some of the popular rates.
| GIC | Rate |
| 1 Year | 3.30% |
| 15 months | 3.40% |
| 2 year | 3.55% |
| 27 month | 3.70% |
| 3 year | 3.65% |
| 4 year | 3.75% |
| 5 year | 4.00% |
| 3 month | 2.50% |
| 6 month | 2.75% |
| 9 month | 3.00% |
Other Banks That Also Offer GICS
While some of the best rates are listed above, many other banks also offer GICs. Some of these banks include:
- Oaken Financial
- Motive Financial
- Simpli Financial
- Achieva Financial
- Peoples Trust
- Wealth One Bank
- Saven Financial
- Hubert Financial
- Meridian Credit Union
- Vancity
- Servus
- ATB Financial
- Manulife Bank
- Home Trust
- Equitable Bank
- National Bank
- Neo Bank
Best GIC Rates by Term
Now that we’ve gone over some of the best rates for each bank, it’s time to look at some of the best rates based on the term.
| Bank | Term | Rate |
| Tangerine | 1.5 Years | 3.35% |
| Tangerine | 2 Years | 3.55% |
| Tangerine | 3 Years | 3.65% |
| Tangerine | 4 Years | 3.75% |
| Tangerine | 5 Years | 3.80% |
As you can tell, Tangerine currently has the best GIC rate in Canada. While they’re a strictly online bank, they offer a lot of the same capabilities as a traditional bank. Also, their parent company is Scotiabank, so they currently have a traditional bank backing them.
Is 5% A Good GIC Rate?
Generally speaking, yes, 5% is a good rate for a GIC. Currently, the best rate we see is around 4% or lower, based on the Bank of Canada’s prime rate. When interest rates were higher in 2023 and 2024, it was common to see GIC rates around 5%. For this reason, many people were taking advantage of GICs and their rates.
Keep in mind, though, that if you lock into an interest rate now and it rises, you won’t be able to take advantage of the new rate. However, if you don’t and the rates decrease, then you won’t be able to take advantage of the higher rate that’s available now. You have to wait until your GIC matures and you earn your annual compound interest before you can reinvest the funds.
Is Now A Good Time to Buy a GIC?
While interest rates are dropping, there are still some decent GIC rates out there. However, many investors are choosing to invest in more lucrative short-term opportunities. That said, GICs still are a great short-term, low-risk investment. Even though rates are a bit lower, you can still earn some great interest on your savings. It’s a great option for those who are hesitant to invest or are new to investing.
Account Types that you Can Invest in a GIC
When it comes to GICs, you can choose what type of account you want your investment to sit in. First, you can choose between registered and non-registered accounts. Some GICs are only available in non-registered accounts. However, some are available in registered investment accounts. Here are the registered accounts you can invest in. You’ll notice that the First Home Savings Account isn’t listed because not all institutions will allow you to invest in it. How you invest in a GIC will affect the tax implications on your bank account.
Tax-Free Savings Account (TFSA)
A TFSA allows you to invest without having to pay any income tax on your interest earned. However, you still have to pay tax on the income that you earn to invest into the account. Because your interest income is tax-free, GICs are a popular option. You can also withdraw from a TFSA whenever you want with no penalties.
Registered Retirement Savings Plan (RRSP)
An RRSP is a retirement savings account in which mutual funds are commonly invested. You don’t have to pay tax on the income you earn and invest until you cash in the account. This is referred to as a tax-deferred account. When you start withdrawing the funds to retire, you’ll start paying income tax on the funds based on your annual income. This should reduce your marginal tax rate since your income will be less.
Registered Retirement Income Fund (RRIF)
An RRIF is the account you use when you’re starting to withdraw money from your registered retirement accounts. There’s a limit on how much you can withdraw to space out your earnings.
Registered Education Savings Plan (RESP)
An RESP is an account that is used to save for education expenses. Once someone has reached the age of majority and can pursue post-secondary education, these funds can be withdrawn and used towards those expenses. Often, proof of enrollment is required to withdraw funds without penalties. Since an RESP is also tax-deferred, income tax isn’t paid until the funds are used. Since the payments are normally spread out and students have low incomes, the tax rate isn’t very high.
Registered Disability Savings Plan (RDSP)
An RDSP is a savings account for people with disabilities created by the Government of Canada. Any contributions made to this account aren’t tax-deductible and can be redeemed at the age of 59. To open this account, you must be approved for the Disability Tax Credit, or the person that you’re investing for must be.
First Home Savings Account (FHSA)
The First-Home Savings Account, also known as an FHSA, is a registered account you can use to save for your first home purchase. With this account, all of your contributions are tax-free, and you can save up to $8,000 per year or a lifetime amount of $40,000. From the date you open the account, you have 15 years to use the funds, or they must be withdrawn or deposited into an RRSP.
What is the GIC Ladder Strategy?
For many investors, the GIC laddering strategy is a common way for investors to break up their initial investment by staggering maturity dates. This range typically spans from 1 to 5 years. Unlike with just one GIC, you have regular access to cash while still earning higher long-term interest rates. Using this strategy, you can maintain cash flow by reinvesting the proceeds into a new GIC annually, a practice often referred to as rolling maturities.
How GIC Interest is Taxed
When it comes to Guaranteed Investment Certificates, the interest that you earn is fully taxable at your marginal tax rate if it’s being held in a non-registered account. When it comes to GICs that mature after multiple years, you still must report and pay income tax on the interest earned each year, even if you don’t receive the payout until maturity. Your T5 tax slip will give you the correct amounts to do so.
Are Credit Union GICs Insured Provincially?
Unlike federal banks, which the CDIC insures, GICs purchased at most credit unions are insured by provincial or corporate provincial deposit guarantee programs. In some provinces, fully guaranteed eligible credit union deposits are available with no dollar limits. Other provinces only insure up to a set deposit insurance limit.
GIC Auto Renewals
When you invest in GICs, you have the option of auto-renewals. When it comes to auto renewals, your original principal payment, and sometimes the interest earned, are automatically reinvested into a new GIC.
When the funds are invested for the new term, it’s usually the same length. However, the rate will be locked into the institution’s prevailing interest rate on the day that it’s invested, meaning it could be lower than your original interest rate. This is called reinvestment risk, but it can be avoided with a grace period.
Foreign Currency and US Dollar GIC Options
Instead of investing in a traditional GIC, most major Canadian banks allow you to invest in both foreign currency and U.S. dollar GICs. The most commonly available foreign currency deposits are:
- U.S. Dollars
- Euro
- British Pounds
- Japanese Yen
As with Canadian dollars, these funds are insured by the CDIC for up to $100,000 per issuer. The terms on these GICs can range anywhere from 30 days to 5 years in all structures, and the minimum investment ranges from $1,000 to $5,000 depending on the currency.
Can You Break a GIC Early?
Whether or not you can break a GIC early is based on the type of GIC that you have. If you have a cashable or redeemable GIC, you can withdraw the funds before the maturity date, as long as it isn’t within the prior notice period. However, non-redeemable GICs are locked (including many student GIC programs), and banks aren’t legally required to release the funds before maturity. They only release funds early in extenuating circumstances, such as the death of the account holder.
How Deposit Brokers Can Help You Find Higher Rates
If you’re looking for the best GIC rate you can find, then a deposit broker may be the way to go. They can help you find better rates by shopping around at different banks and credit unions to get the best deals on the market. Often, getting a brokered GIC lets you access special group rates that many regular buyers don’t get.
How Do Escalating and Step-Up GICs Work?
These types of GICs are often referred to as rate risers or escalator GICs. They feature a guaranteed interest rate that automatically increases at preset intervals. These pre-set intervals are usually every year when you’re enrolled in a multi-year term. These GICs have higher payouts in later years and are even known to allow penalty-free withdrawals on each anniversary.
Other Investment Options
While GICs are a safe investment and offer a guaranteed real rate of return, they aren’t always the best option for everyone. They might be the best option for non-resident investors, but someone looking for an emergency fund might prefer a different account because of the early redemption penalty.
Some other good accounts and investment options to consider include:
- Cash ETFs
- Money Market Funds
- High-interest savings accounts instead of chequing and savings accounts (high-yield savings)
- Corporate Cash
You can also choose self-directed accounts, and each investment type will have a different interest payment frequency. The most common options are monthly interest payments and annual interest payments. In terms of the account itself, you can have joint account holders with purchasing power, a beneficiary designation, and even access to competitive interest rates.
Final Thoughts
While GICs earn less interest than other forms of investing, they are a great way to increase your savings, and they are more than just a high-interest savings account. If you’re saving with a goal in mind and can lock away a portion of your savings, then it’s a great option. Many will use a GIC for a portion of their savings and invest the rest in more readily redeemable options.
If you’re new to investing, GICs are a safe way to start your investing journey while earning compound interest (simple interest is only commonly used for loans). You can start earning with as little as $500 or $1,000, and you can use these funds to save for retirement, the purchase of your first home, or even a trip or large purchase. The choice is up to you.
