If you want to build wealth in Canada, it will take more than just saving part of your monthly paycheck in a savings account. It would be best if you considered investing your money in stocks.
However, suppose you don’t have the stomach for significant risks and are looking to invest in a simple investment that offers you interest without exposing you to many risks.
In that case, you should invest in Guaranteed Investment Certificates (GIC).
It might not be a great way to get you rich, but it will safeguard your money. GICs work like savings accounts. You can deposit your money and get annual interest rates.
However, GICs are usually locked in for a set period, between one month and five years.
With GICs, you don’t worry about the stock market’s volatility because it is a secure and safe investment with low risks and rewards. Even the CDIC guarantees you will receive your initial deposit back in case of market downturns.
This article talks about the best GIC rates in Canada, the best GIC providers in Canada, what GICs are, how to buy GIC, and a lot more. If you are thinking about investing in GICs, get right into the article.
The Best GIC Rates in Canada for 2022
GIC rates are usually based on the type and term. Most of the best GIC rates in Canada 2022 are not from the traditional big banks in Canada. They are primarily available from independent online banks and credit unions.
It may not be easy to choose which GIC is best for you. There are many Canadian banks, credit unions, and financial institutions offering GIC. The best one for you depends on what you are looking for.
To make your choice, pay attention to the type of GIC, the length of the term, registered or non-registered GIC, and its interest rates.
Saven Financial is a digital banking platform and a division of FIrstOntario Credit Union.
With Saven GICs, you can choose how much you want to invest, the term of your investment (long or short), and how you would like your interest payout (reinvested back in GIC or to your saving account).
Eligible deposits at Saven GICs are insured through the Deposit Insurance Reserve Fund, administered by Ontario’s Financial Services Regulatory Authority (FRSA).
Saven Financial currently offers one of the best GIC rates in Canada.
HISA and GICs
Oaken Financial is an online banking institution owned and operated by Canada’s largest independent trust, Home Trust.
Oaken Financial offers some of the highest saving rates in Canada. They help you make the most of your hard-earned money.
Each deposit is made available through either Home Trust Company or Home Bank. Both are separate members of the Canadian Deposit Insurance Corporation (CIDC), meaning all Oaken GICs are covered by CIDC up to applicable limits.
When you invest in Oaken GICs, you get your original principal and all the agreed-upon interest when the GIC matures.
RRSP, TFSA, RRIF Non-registered
EQ Bank is one of Canada’s most popular online banks, offering a no-fee banking system. CDIC insures it through its parent bank, Equitable Bank.
EQ Bank offers competitive GIC rates to help maximize your earnings and manage your growing portfolio. EQ Bank GICs are available as both registered and non-registered investments.
Its Savings Plus account and GICs offer the best 5-year GIC rates in Canada.
To invest in EQ Bank GICs, you must open a Savings Plus account, which offers a no-banking fees system, free day-to-day transactions, and unlimited Interac e-Transfers.
You will transfer your money for the GIC from this account, and upon maturity, EQ bank will pay your money into the account.
Peoples Trust is a division of Peoples Group. Based in Vancouver, British Columbia, it offers mortgages, GICs, credit cards, and commercial loans in Canada.
When investing in Peoples Trust GICs, you can expect the best. Their GIC rates are one of the best in Canada.
They do not charge any fees for setup or membership, no service fees, and no transfer fees. Eligible deposits are secured and guaranteed by CDIC insurance coverage.
TFSA, RRSP, Non-registered
Hubert Financial is a Sunova Credit Union Ltd subsidiary, a Manitoba-based credit union. Currently, Hubert Financial offers the highest GIC rates for a 5-year term in Canada.
Hubert Financial is the way to go if you are looking to save for future education or retirement expenses. Eligible deposits are insured under the Deposit Guarantee Corporation of Manitoba (DGCM).
Non-registered, TFSA, RRSP, RRIF
The Best GIC Rates from Major Canadian Banks
There are big banks in Canada that offer GIC options. Their rates might not be enticing, but I have compared them below nonetheless.
If you feel like investing in a notable institution with more extensive brand recognition where you are most assured of security for your money, then you should check out these major banks.
TD Bank GIC rates range from 2.0% for non-registered and registered accounts.
Right now, TD bank has a Special Offer GICs which includes a 100-day term with up to 1.65% in interest earned and an 18-month term with up to 3.00% in interest earned.
With TD Bank GIC, you can choose a term length between 1 and 5 years and get cashable and non-cashable, market-growth, and U.S. Dollar Option GICs.
You can also choose between simple or compound interest rates when you focus on their non-redeemable options.
Scotiabank offers GIC rates from 0.95%.
You can choose between compounded annually or semi-annually, or you can get paid monthly.
However, each has a slightly different GIC rate, with an annual compounding rate at the top of the bunch.
There is a minimum investment of $500 if you choose annual or semi-annual, and if you choose to receive monthly interest, then the minimum investment is raised to $5,000.
CIBC GIC rates go up from 2.00%.
Their long-term GIC rates are only available to you after a minimum deposit of $1,000. You can only receive monthly interest when you invest $5,000.
CIBC offers different types of GICs, from CIBC Bonus GIC, EasyBuilder GIC, Flexible GIC, and Market Linked GICs to Variable Rate GIC.
Royal bank GIC rates start from 1.25% and mostly come with a minimum investment ranging from $500 and $1,000.
RBC offers several types of GICs. They have the Guaranteed-Return GIC, which includes the Non-redeemable GIC, Redeemable GIC, One-Year GIC, RateAdvantage GIC, and lots more.
In addition to these, RBC also offers market-linked GIC, interest-linked GIC, and registered options.
When you invest in GIC with a length of 1 year or more, you have the option of receiving monthly payouts. However, your rates will be lower with this option.
Bank of Montreal
BMO offers attractive GIC rates starting from 2.5% for a minimum investment of $1,000.
BMO offers you the flexibility to choose from several payment options and terms. They also have several types of GIC, including cashable, non-cashable, progressive, income-generating, and U.S. Dollar options.
BMO partners with Air Miles and allows you to earn one mile per month for every $1,000 you invest in GIC.
What are GICs?
Guaranteed Investment Certificates, or GICs, are a popular type of investment that allows you to invest funds with a financial institution over an agreed period, known as the term.
At maturity, you receive a guaranteed amount, which is a total of the principal amount invested and an interest based on the agreed rate.
GIC is one of the safest investments available to Canadians and works well for a conservative investment portfolio.
Some GICs offer you flexibility and allow you to withdraw your money before it reaches maturity. These are cashable or redeemable GICs; they offer lower interest rates than other non-redeemable GICs.
There are also GICs with a fixed interest rate. At the same time, Variable-rate GICs offer the option to earn variable interest, and Market-linked GICs offer returns tied to the stock market’s performance.
The Foreign currency GIC holds your foreign currencies while earning interest. At the same time, the Laddered GIC allows you t take advantage of higher interest rates and fluctuations to stagger the maturity dates of your investment.
How to Buy GICs in Canada
Once you have decided to invest your funds in GIC, you will find that investing in GIC is straightforward. Follow the steps below and buy your GIC in Canada.
1. Decide How Much Funds You Want To Invest
Make up your mind on how much you can put away without looking back. Most GICs in Canada will tie up your funds for the term specified. However, if you need your money sooner than the specified terms, you should opt for redeemable or cashable GIC.
2. Choose a Type Of Interest Rate
There are different types of GIC with varying rates of interest. Choose from the options available. If you want a specific interest rate for the whole term of the GIC, then you should go for fixed GIC rates. However, if you’re confident in the prospect of changing interest rates, it might be better to go with index-linked or market-linked GIC
3. Do Your Research
In this article, I have made a list of the best GIC rates in Canada; choose which of the GIC rates suits you the most. Compare and look for the most competitive GIC rates. You can talk to different banks and financial institutions before you commit to any decision.
4. Choose a Financial Institution and GIC
When you have chosen the type of GIC that better suits you, take your time to select the provider. Although the big five banks have enormous brand recognition, their rates are less attractive than some of the online banks we mentioned.
Are GICs Worth It?
Though GICs do not provide high returns compared to other available investment options, it is still one of the safest investments.
GICs are an excellent choice if you need to make savings you wouldn’t need for a while. GICs are low-risk and low-reward investment options.
If you do not like volatility and cannot stomach significant risks, then GICs are worth it.
Final Thoughts on Best GIC Rates in Canada
Everyone is looking for ways to make money work for them. Most of us are already working hard, and we need something to grow the money we have.
GICs are a low-risk, low-effort, guaranteed way to add interest to your financial portfolio. Instead of using a savings account, put your money into GIC and watch it grow.
FAQs on Best GIC Rates in Canada
Are GICs taxable?
Yes. You will pay taxes on any interest income earned if your GIC isn’t held in a tax-sheltered account like the TFSA or the RRSP. Using the marginal tax rate, the income is taxed like all other regular income,
Can you lose money in a GIC?
No. GICs are guaranteed investments. You are assured of receiving your invested principal and a certain percentage of interest.
How do I find a good GIC rate?
Getting a reasonable GIC rate depends on how long you want to invest, how much you are willing to invest, and what kind of investment you are going for.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.