GICs (Guaranteed Investment Certificates) are a stable and low-risk investment option in Canada, making them popular among risk-averse investors. While they offer guaranteed returns, these returns are typically lower than those from stocks, mutual funds, or bonds.
Rates
GIC rates in Canada vary by financial institution. Top banks offering competitive rates include RBC ESG Market-Linked GIC, CIBC Index Growth GIC, EQ Bank, and Tangerine. Some institutions allow early withdrawals, subject to penalties.
GIC Details
Issued by banks and trust companies, GICs guarantee a fixed return over a specified period. Despite their lower returns compared to other investments, GICs appeal to those seeking financial security. Rates depend on term length, institution-specific rates, and other factors. Term lengths range from 1 year to 5 years or more, and each term length can offer different rates, even within the same institution.
Benefits
GICs offer several advantages:
- Guaranteed returns
- Reduced overall risk
- Portfolio diversification
- Steady income stream, even during recessions
- Various term lengths
- Short-term and long-term options
- GIC laddering
Additionally, banks offer different types of GICs, such as Fixed-Rate GICs, Escalator GICs, Market-Linked GICs, and Variable Rate GICs. By considering the investment amount, interest rate, and term, investors can estimate potential earnings. Higher interest rates on long-term GICs can significantly boost returns.
Finding the Best Rates
To find the best GIC rates in Canada, compare rates and terms from multiple banks and financial institutions. Some institutions may offer withdrawal options before maturity, often with penalties. For those needing flexibility, it’s crucial to review these options.
Investors often spread their funds across several GICs with different terms, a strategy known as laddering. This approach provides regular payouts and mitigates risk.
Top GIC Rates Today
Here are some of the best GIC rates available in Canada as of now:
| Institution | Term | Rate (Annual) | Minimum Deposit | Notes |
|---|---|---|---|---|
| Home Trust Company | 1 Year | 5.65% | $1,000 | Annual compound |
| 3 Year | 5.45% | $1,000 | Annual compound | |
| Tangerine | 1 Year | 5.70% | – | |
| 1.5 Year | 5.75% | – | ||
| 5 Year | 3.85% | – | ||
| Oaken Financial | 1 Year | 5.75% | $1,000 | Annual |
| WealthONE Bank of Canada | 1 Year | 5.98% | $1,000 | Non-redeemable |
| 3 Year | 5.48% | $1,000 | Non-redeemable | |
| EQ Bank | 1 Year | 5.65% | – | Non-registered |
| 5 Year | 5.15% | – | Registered | |
| Peoples Bank | 1 Year | 5.80% | – | Long-term GIC |
| 5 Year | 4.50% | – | Long-term GIC | |
| Motive Financial | 1 Year | 5.75% | – | Non-registered |
| 3 Year | 5.48% | – | Non-registered | |
| Haventree Bank | 3 Year | 5.36% | $5,000 | Long-term GIC |
| 5 Year | 5.01% | $5,000 | Long-term GIC | |
| LBC Digital | 3 Year | 5.35% | $100 | Non-redeemable |
| 5 Year | 5.30% | $100 | Non-redeemable | |
| Laurentian Bank | 3 Year | 5.35% | $500 | |
| 5 Year | 5.30% | $500 |
It’s essential to note that GIC rates are subject to change. Investors should always verify current rates and terms before committing funds.
GICs provide a secure investment option with guaranteed returns, making them an attractive choice for those prioritizing safety over higher returns.
FAQs
What is a GIC?
A GIC is a Guaranteed Investment Certificate with fixed returns.
Why invest in GICs?
GICs offer low risk and guaranteed returns.
Can I withdraw GICs early?
Yes, but penalties may apply.
How do GIC rates vary?
Rates vary by term length and institution.
What is GIC laddering?
Investing in multiple GICs with different terms to spread risk.
