How to use this tool: You can simply scan the table below to view GIC interest rates offered by financial institutions across Canada. Click on one of the tabs at the top of the table to focus on your choice of Non-Registered, Registered, TFSA-eligible or U.S.-dollar GICs.
Or, follow the prompts in the six fields at the top of the finder tool to input the amount you wish to invest in a GIC and your preferred investment term, along with other details, and the calculator will automatically display what your total return would be from each of the financial institutions listed. This allows you to compare the options side-by-side and decide which is the best for your money.
Whether you’re looking for a short-term cashable GICs, or want a longer-term investment like an RRSP GIC, this tool will help you find the best GIC rate for your financial needs.
Need more information? Scroll down to read information from our MoneySense editorial team on the types of GICs available; what terms you can choose from and why you might choose a shorter or longer term; how GIC deposits are insured; and four editors’ picks for the best GIC rates in Canada.
Best GIC Rates in Canada
Best GIC rates in Canada 2020
Rates last updated January 2020
Have you ever felt like your money could be working harder for you—if only you weren’t afraid of the risk? To boost your return while still keeping your principal safe, you might want to consider a guaranteed investment certificate, or GIC. These work much like savings accounts: In exchange for leaving your money deposited for a certain period of time, you are guaranteed to receive an interest payment at the end of the term. Read on to learn everything you need to know about choosing the right GIC* for your needs, along with our top 5 GICs in Canada.
What is a GIC?
Guaranteed investment certificates are essentially termed loans that you make to a bank or financial institution. When you purchase a GIC, you agree to a specific term (period of time) during which your deposit will remain with the bank, and in return the bank offers you a guaranteed interest rate. You can invest in a GIC* for as little as $500, and there’s typically no fee associated with buying one. The only thing you’re required to do is leave the money with the bank—and the longer you do so, the higher the rate. Early withdrawals may (but not always) incur a penalty.
Types of GICs
There are many different kinds of GIC products, but these are the most common:
- Cashable GICs*
Typically available for short 1-year terms and free to cash out early after a 30- or 90-day closing period, these GICs are perfect for people who think they may need access to their money, but want to invest to get a higher guaranteed interest rate. While the trade-off for this flexibility is usually a lower interest rate, cashable GICs can be a smart way to protect yourself against interest rate fluctuations. If the interest rate rises, your money won’t be locked in at a lower fixed rate for long. If the interest rate is falling, on the other hand, a GIC might prove to be better than a savings account, allowing you to lock in a higher percentage.
- Redeemable GICs*
Redeemable and cashable GICs are very similar, and even some banks use the terms interchangeably so it’s prudent to check each product before purchasing it. That said, in many cases the difference is that a redeemable GIC allows you to access your money before the end of the term—without a waiting period—but the GIC may be subject to early redemption rates that can drastically cut the interest you receive.
- Non-redeemable GICs*
As the name suggests, non-redeemable GICs can’t be cashed out prior to the end of the term without incurring a penalty. However, they tend to offer higher interest rates, so may be ideal for those wanting a secure investment over a fixed amount of time.
- Registered GICs*
These GICs have the advantage of being investments inside a registered investment account like an RRSP, RRIF or TFSA, so you are not taxed on the interest you earn.
- Market-linked GICs
These GICs perform according to a specified market and only guarantee your principal deposit. With one foot in a GIC and the other in the stock market, these products may be right for those looking for a slightly higher amount of risk with the possibility of greater rewards.
- Foreign currency GICs
These are GICs in currencies other than Canadian dollars, usually in U.S. dollars. This product might work well for someone who travels or works frequently in another currency.
Terms of GICs
Shopping for a GIC is easy but not quite as simple as looking for the best GIC rate*. To choose the best product for your circumstances, you’ll want to also think about the terms—your plans for the money will dictate what’s best for you.
Short-term GICs take less than a year to mature. The principal is guaranteed along with an advertised rate of interest. These products are a good way to get a bit more out of your investment without sacrificing much liquidity. Long-term GICs have terms of one year and more, and typically have higher interest rates than short-term GICs. When strategically purchased, these products can be used to generate part of a risk-averse investor’s monthly income.
GICs can pay out monthly or annually. If you need access to interest accrued on a regular basis (for example, as part of your monthly income), you’ll want the former.
How GIC deposits are insured
GICs are guaranteed, which is one of the reasons why they are such a popular investment. These protections are many-fold, starting with the guarantee of the financial institution they are purchased from. They are legally obligated to return to you your initial investment plus interest (depending on the product you choose).
But what happens if the financial institution goes belly-up? Then the next level of protection kicks in: Many GICs are protected by the Canada Deposit Insurance Corporation (CDIC) but some—particularly those purchased through credit unions—carry coverage through provincial organizations. The CDIC covers typically up to $100,000 on deposits with terms of less than 5 years, and does not cover foreign currency GICs.
Provincial insurers vary by province. Insurers in Alberta, British Columbia, Manitoba, and Saskatchewan cover all deposits accepted by the institution with no maximum. In Quebec, savings and GICs of up to $100,000 are covered, plus RRSPs with a $100,000 limit in Quebec. In Ontario, savings of up to $250,000 are covered, while registered accounts (including RRSPs, TFSAs and RESPs) are fully covered. In New Brunswick, Nova Scotia, and Newfoundland and Labrador, savings, GICs, and RRSPs of up to $250,000 are covered, and in Prince Edward Island the insurer protects savings and GICs of up to $125,000 and unlimited RRSPs.
Five notable GICs in Canada
You have numerous options when it comes to GICs, and the top GIC for you will depend on your financial situation and life phase. Below are some notable offerings for Canadians.
Oaken Financial: 1-year cashable GIC
If you’ve never heard of Oaken Financial* before, you’re not alone. This direct banking arm of Home Trust was launched in 2013, and operates almost completely online (though there are a few bricks-and-mortar offices across the country). Oaken is one of many online banks springing up across Canada, serving a population that is ready to forgo in-person interactions for better interest rates, and low or no fees. Some investors might approach Oaken with caution due to their relatively recent entrance to the marketplace, but for those ready to take a calculated risk, their interest rates are tempting and Oaken GICs are eligible for CDIC coverage. They require a minimum deposit of $1,000 and pay out their interest annually.
Consider: 1-year cashable GIC at a 2.53% return
GICdirect: 1-year non-registered GIC
GICdirect* is a deposit brokerage that works with more than 40 institutions to deliver some of the best rates on GICs. The main selling point here is that you can save time and effort researching various individual GIC options by going to GICdirect, which not only has access to what the big banks are offering, but also financial products from smaller regional institutions. Depending on the issuer, these GICs are insured by CDIC or a provincial body. GICdirect claims their GICs typically return 1.00% to 1.50% higher than local retail banks.
Consider: 1-year non-registered GIC at a 2.50% return
People’s Trust: 1-year registered GIC
People’s Trust* is a division of People’s Group, based out of Vancouver, BC. Although they may not have massive name recognition, they’ve been in operation since 1985—that’s 35 years. People’s Trust offers a variety of products with competitive interest rates, and they are CDIC-insured.
Consider: 1-year registered GIC at a 3.00% return
TD Bank: 5-year TD Canadian Banking & Utilities GIC
Also known as equity-linked, market-linked GICs are a sort of hybrid that is part GIC and part stock market investment. These GICs follow stock or bond indexes or equity market performance to determine their rates, so while the risks are greater, so are the potential rewards. If the markets do well, the 5-year TD Canadian Banking & Utilities GIC offers a maximum return of 25.00% over five years (the downside being that if the markets do really well, your return from this GIC won’t fully reflect that). As one of the big five banks in Canada, TD is a name that can put investors at ease and their TD Canadian Banking & Utilities GIC adds to this sense of security by guaranteeing your initial deposit plus a 2.75% minimum rate of return over the five-year term. That’s very likely to be lower than the rate of inflation, meaning your deposit will actually lose purchasing power by the end of the 5-year term; but if you’d like to benefit from the potential upside of the market, without risking your capital, this product may be an option for you.
Consider: TD Canadian Banking & Utilities GIC with a 2.75% minimum rate of return
ICICI Bank Canada: 1-year non-redeemable USD GIC
Foreign currency GICs are a great way to invest in a currency other than Canadian dollars, in preparation for a trip or simply to diversify your portfolio. Part of a global banking brand, ICICI Bank Canada* offers competitive rates on redeemable and non-redeemable GICs with a low minimum deposit of $1,000. Note that foreign currency GICs are not CDIC-insured so if the institution fails, you will lose your gains.
Consider: 1-year non-redeemable USD GIC at a 1.70% return
What does the * mean?
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