GICs (Guaranteed Investment Certificates) in Canada: What They Are and How They Work

What it is

A Guaranteed Investment Certificate (GIC) is a deal with a bank: you lend them your money for a fixed period — 30 days to 5 years or more — and they guarantee to pay it back with a fixed rate of interest. The “guaranteed” is the whole point: unlike stocks or mutual funds, a GIC cannot lose value.

How it works

1. Choose a term: 30, 60, 90, 180 days, or 1 to 5+ years. Longer terms usually (not always) pay higher rates.
2. Choose redeemable or non-redeemable. Non-redeemable locks your money until maturity for a higher rate. Redeemable (or “cashable”) lets you cash out early, at a lower rate.
3. The rate is locked the day you buy. Whatever happens to interest rates afterward, yours doesn’t change.
4. At maturity, you get your principal plus interest. You can renew into a new GIC, move it elsewhere, or — if it was held in a TFSA or RRSP — keep the tax sheltering going.
5. GICs can live inside registered accounts. A GIC held in a TFSA earns tax-free interest; in an RRSP, tax-deferred. Or hold it non-registered (taxable).

A common strategy is laddering: splitting money across 1-, 2-, 3-, 4-, and 5-year GICs so something matures every year — a balance of yield and flexibility.

What it’s used for

For: money you won’t need for a set period and want zero risk on — a house down payment in two years, tuition next year, or the conservative slice of a retirement portfolio.

NOT for: emergency money (non-redeemable GICs lock it away), or long-term wealth building as your only investment — over decades, guaranteed rates have historically lagged diversified markets.

Who provides it in Canada

• Online banks and credit unions pay the best rates: EQ Bank, Oaken Financial, Tangerine, WealthONE Bank, Achieva Financial, Hubert Financial, Haventree Bank, and others.
• Big Five banks (RBC, TD, Scotiabank, BMO, CIBC) all sell GICs, typically at noticeably lower rates.
• GIC brokers and deposit brokers can shop multiple institutions for you.

What it costs

GICs have no fees — the bank profits from lending your money out at higher rates. What matters is the rate, and the gap between providers is large. As of October 1, 2026 (verified):

| Term | Best rates (online banks/CUs) | Big Five banks (approx.) | |—|—|—| | 1-year | ~3.80–4.00% (WealthONE 3.80%, Northern Birch CU 4.00%) | ~2.45% | | 5-year | ~4.40–4.50% (Oaken 4.40%, WealthONE up to 4.50%) | ~2.75% |

• Minimum deposits: typically $500–$1,000 (EQ Bank allows from $100).
• Protection: deposits at CDIC member institutions are insured up to $100,000 per depositor, per institution, per category. Credit unions are covered by provincial insurers instead.
• Rates move with Bank of Canada policy — check current rates before buying.

Newcomer notes

• No Canadian credit history needed to buy a GIC.
• You’ll need a SIN: interest is reported to the CRA on a T5 slip.
• Newcomers can hold GICs inside a TFSA — but understand your TFSA contribution room first. Overcontributing triggers penalties every month until fixed.

Risks / watch-outs

• Locked in: with a non-redeemable GIC, your money is inaccessible until maturity (with rare hardship exceptions). Never lock away your emergency fund.
• Rate risk: if rates rise after you buy, you’re stuck at the lower rate until maturity. Laddering softens this.
• Reinvestment risk: at maturity, rates may be lower than when you bought.
• Inflation: a guaranteed 4% still loses purchasing power if inflation runs at 5%.
• The Big Five rate gap: buying a GIC at your main bank out of convenience can cost you a full percentage point or more versus an online bank. Always compare.

FAQ

Can I lose money in a GIC? No — that’s the guarantee. Your principal and the agreed interest are contractual, and CDIC insurance (up to $100,000) backs deposits at member institutions even if the institution fails.

Redeemable vs non-redeemable — which should I choose? Non-redeemable pays more but locks your money. Choose redeemable only if there’s a real chance you’ll need the cash early; otherwise you’re paying for flexibility you won’t use.

GIC vs high-interest savings account? HISA: accessible anytime, variable rate. GIC: locked in, guaranteed (usually higher) rate. Rule of thumb: money you might need soon → HISA; money with a known date → GIC.

What happens when my GIC matures? The institution will usually auto-renew it into a similar term at whatever the current rate is — often without telling you loudly. Mark the maturity date and decide yourself: renew, move it, or spend it.

What’s the minimum to buy a GIC? Typically $500–$1,000 at most institutions; EQ Bank allows from $100. Check current minimums — they vary.

Educational content only — not financial advice. Rules and promotions change; verify current details with the provider or CRA.