Find the Best GIC Rates in Canada

1. Choose your investment amount

Most GICs require a minimum investment, typically between $500 and $5,000.

2. Select your term

Terms range from 30 days to 10 years. Longer terms generally offer higher interest rates.

3. Choose your GIC type

Options include redeemable vs. non-redeemable, registered vs. non-registered, and more.

4. Receive your returns

Interest can be paid monthly, annually, or at maturity, depending on the GIC you choose.

Primary Factors

Other Influencing Factors

Base Rate: Bank of Canada overnight rate (e.g., 2.0%)

Term Premium: Additional percentage based on term length (e.g., +0.5% for 3 years)

Risk/Liquidity Premium: Compensation for non-redeemable features (e.g., +0.3%)

Competitive Adjustment: Adjustment based on market competition (e.g., +0.2%)

Promotional Bonus: Special limited-time offer (e.g., +0.15%)

Final GIC Rate = 3.15%

Non-Redeemable GICs

These GICs cannot be cashed out before their maturity date without significant penalties or forfeiting interest.

Pros:

• Higher interest rates
• CDIC protection up to $100,000
• Guaranteed returns

Cons:

• No access to funds until maturity
• Potential missed opportunities if rates rise

Redeemable/Cashable GICs

These can be cashed out before maturity, offering flexibility but typically at the cost of lower interest rates.

Pros:

• Access to funds if needed
• Still offers guaranteed returns
• CDIC protection up to $100,000

Cons:

• Lower interest rates than non-redeemable
• May have minimum holding periods
• Partial interest may be forfeited upon early redemption

Registered GICs

Held within registered accounts like TFSAs, RRSPs, RRIFs, and RESPs.

• TFSA GICs: Tax-free growth of your investment
• RRSP GICs: Tax-deferred growth until withdrawal
• RESP GICs: For education savings with government grants
• RRIF GICs: For retirement income after RRSP conversion

Non-Registered GICs

Held outside of registered accounts, with interest income taxable in the year earned.

Features:

• No contribution limits
• Interest is taxable
• No withdrawal restrictions based on account type
• Can be used in income-splitting strategies

Fixed-Rate GICs

The most common type with a predetermined interest rate that remains constant throughout the term.

Market-Linked/Equity-Linked GICs

Returns are tied to the performance of market indices or equity markets, with principal typically guaranteed.

Escalating Rate GICs

Interest rates increase at predetermined intervals throughout the term.

Foreign Currency GICs

Denominated in foreign currencies (typically USD), offering exposure to foreign exchange markets.

Short-Term GICs

Common Short-Term GIC Terms:

• 30-day GICs
• 90-day GICs
• 180-day GICs
• 270-day GICs

Long-Term GICs

Common Long-Term GIC Terms:

• 2-year GICs
• 3-year GICs
• 5-year GICs
• 10-year GICs

Interest earned on non-registered GICs is taxable in the year it is earned or paid to you, depending on the GIC's structure. GICs held within registered accounts like TFSAs, RRSPs, or RESPs follow the tax rules of those accounts. TFSA GICs are completely tax-free, while RRSP GICs are tax-deferred until withdrawal.

This depends on the type of GIC you have:

• Non-redeemable GICs: Generally cannot be cashed out before maturity. Some institutions may allow it in exceptional circumstances with significant penalties or complete forfeiture of interest.
• Redeemable/cashable GICs: Can be cashed out before maturity, often with reduced interest rates or after a minimum holding period.

No, traditional GICs are closed to additional deposits once purchased. The investment amount is fixed at the beginning of the term. If you want to invest more money, you'll need to purchase a separate GIC. Some institutions offer "GIC ladders" or series that make it easier to manage multiple GICs with different maturity dates.

GIC interest can be paid in different ways, depending on the product:

• At maturity: All interest is paid at the end of the term along with your principal.
• Annually: Interest is paid out once per year.
• Semi-annually: Interest is paid twice per year.
• Monthly: Interest is paid monthly, ideal for generating regular income.
• Compound interest: Interest is reinvested, earning you "interest on your interest."

When your GIC matures, you typically have several options:

• Reinvest in a new GIC with the same or different terms
• Transfer the funds to another account
• Withdraw your principal and interest
• Some GICs have automatic renewal features, which will reinvest your money in a similar product if you don't provide instructions before maturity

Generally, there are no direct fees for purchasing or holding GICs. The financial institution makes money from the spread between what they pay you in interest and what they earn by lending out or investing those funds. However, there may be fees for:

• Early redemption of non-redeemable GICs (if allowed)
• Wire transfers when moving large sums
• Account fees related to registered accounts holding the GICs