Our guide to the best GIC rates in 2024

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When the market behaves in strange ways, it is reassuring to have dependable and safe investment products. GICs are one such product.

It is not a surprise that these instruments are more popular at the time of publication in 2022 than they have been in a long time. Inflation has pushed GIC rates up at the same time that there is uncertainty around stocks.

This guide explores what GICs are, how they work, their pros and cons and why they are an essential part of many investors' long-term planning.

What is a GIC?

GIC stands for guaranteed investment certificate. This type of investment is available for individuals in Canada. Because they are guaranteed they are very safe, although they offer a relatively low rate of return. When you invest in a GIC you know that you will lock your money in for a specific period. Once that period expires you get your entire investment back plus earned interest.

In exchange for giving up some temporary liquidity, a GIC offers an investing rarity, a guaranteed return on your investment. Not only that, it is a much better interest than a savings account. Just be sure that you do not invest funds that you need in the near future.

Various types of GICs are sold by Canadian banks and trust companies and are a great choice for risk-averse investors. They are well-liked, particularly by investors reaching retirement age who want to safely lock in earnings made in more up-and-down investment vehicles like the stock market. GICs are a great tool for capital preservation.

How do GICs work?

When you get a GIC, you deposit money with the bank offering it. You agree to leave the money there for a pre-determined period. Once that time is up, typically one to five years later, you get your money back with interest. In essence, you lend money to the bank. Banks borrow money in this way because they are required by law to meet specific capital levels. They borrow your money so that they can lend it out to their borrowers.

GICs pay out either annually or at the end of the term.

The length of the deposit influences the interest rate. The longer the sum stays with the bank, the higher the interest that it is willing to commit to paying back.

GICs pose essentially no risk. Banks are required by law to pay them back with the agreed-upon interest. Even in the event of a bank's closure, the Canadian Deposit Insurance Corporation, or CDIC, insures GICs for up to $100 000 (as long as they are no longer than 5 years). The biggest potential risk of a GIC is needing your money back early and paying a penalty to get it back.

What are the pros and cons of GICs?

GICs offer some significant advantages for the right type of investor. They are a product that belongs in a lot of investors’ portfolios. Let’s consider some of the major benefits and drawbacks for investors considering GICs.


  • Extremely safe: your principal is insured by the Canadian government
  • Typically have higher interest rates than regular savings accounts and government bonds
  • Minimum deposit sums are as low as $500
  • Investors are usually not required to pay a fee to open a GIC
  • Diversity of terms/features available


  • Interest rates are often lower than stocks, ETFs and mutual funds
  • A fund can lose purchasing power with inflation
  • The best GIC rates require funds to be inaccessible for lengthy periods
  • Early withdrawal may not be possible or may incur a penalty

What types of GICs are available?

There are a few variations of GICs worth knowing. Here are some popular options and what makes them stand out:

  • Fixed-Rate GIC: They offer a fixed term and fixed interest rate. Money is locked in until maturity, but in some cases, it may be possible to withdraw it with a penalty.
  • Variable-Rate GIC: The principal is guaranteed, but the return on the investment is not. Instead, interest is tied to the prime rate. They offer potentially higher interest than a fixed-rate GIC if the market conditions are right. Investors have more flexibility to withdraw their money than with the more rigid fixed-rate GIC.
  • Market-linked GICs: These are also known as Equity-linked GICs. The return on investment is tied to the performance of the related equities. They might pay more than their fixed-rate counterparts or not, but the principal is guaranteed and often some interest too.
  • Cashable GICs: These GICs lock in an investor’s deposit for less than the time of the GIC. While they may be valid for a year, the principal may be withdrawn after 30-90 days. This flexibility comes at the cost of earning less interest than a traditional GIC.
  • US Dollar GICs: Are you concerned about currency fluctuations? It is possible to purchase GICs in foreign currencies, notably, US Dollars.

Banks will attach different conditions, options and sometimes names to their GICs. Terms usually extend to around 5 years, but in some cases may longer one may be available. $500 is a typical minimum deposit, but different banks and products have different minimums as well, but

Good to know

Looking for the best GIC rates? You can compare offers at the top of this page.

What’s the difference between a registered and a non-registered GIC?

Registered and non-registered refers to the account that the GIC is held in more than it does the GIC itself. Some providers, however, offer slightly different products or interest rates depending on whether it is linked to a registered account or not.

Registered GICs are GICs that are held in a registered account like an RRSP, RRIF, TFSA or RESP. The advantage of these is potential tax savings on the interest you earn, just like with other investments held in registered accounts.

Non-registered GICs, on the other hand, are not held in a registered account and are a little more liquid.

!! Pick a non-registered GIC if you want increased flexibility with your money. If what you care about is absolute interest and you’re investing for the long-term, a registered GIC offers more bang for your buck.

Cashable GICs vs non-redeemable GICs: What’s the difference?

Most simply, funds in non-redeemable GICs cannot be withdrawn, without penalty, before the term expires.

This inflexibility comes with better interest rates. Term lengths vary between providers. They may be available as a short-term GIC for as few as 30 days. At the long end, they typically go to 5 years. Investors are required to deposit with the bank for a pre-determined period.

A cashable GIC, or redeemable GIC, offers greater liquidity. Investors may withdraw their deposit, after a short closed time period, without paying a penalty fee.

How is interest calculated on GICs?

GIC interest rates are generally quoted as annual interest rates. That rate and the length of the term will let you know how much you will earn. Longer terms mean higher interest rates.

Interest may be simple interest or compound interest, so check before buying and be sure to understand the difference.

Here’s how it works: a 5-year guaranteed investment certificate for $4000 at a 2% interest rate will be worth $4,416.32 at maturity with compound interest. You will have earned that $416.32 because you’ll earn interest on top of your interest. With simple interest, it doesn’t work like that. You would earn 2% interest on your $4000 five times for just $400. Here $16.32 isn’t a huge difference, but the higher the interest rate the more pronounced this difference becomes.

Interest typeCompoundingSimple
Initial investment
Interest rate
GICs: Compounding vs simple interest at 2%

Let’s assume you can get 5% interest on your GIC. That’s right around the best rate available at the time of writing. Your $4000 would earn you $5101.13 by the end of the term with compounding interest or $800 with simple interest. That $305.13 is better in your wallet than in the bank’s!

Interest typeCompoundingSimple
Initial investment
Interest rate
GICs: Compounding vs simple interest at 5%

What is the best GIC interest rate in Canada?

GIC rates fluctuate based on the type of GIC, its length and market conditions, so the best Canadian GIC changes. We’ve seen rates evolve quickly in the months prior to this article’s publication due to inflation.

For example, as of September 2022, 5-year GIC interest rates are averaging 4.7% interest in Ontario. Some providers pay just over 5%. That is higher than it has been in a long time. Back in March 2022, it was difficult to find 3%.

We averaged interest rates from 21 providers. Here’s what they’re paying and the highest and lowest our team observed.

Average interest
Highest interest
(LBC Digital and Peoples Trust
(Saven Financial)
(Wealth One Bank of Canada)
(MAXA Financial)
(MAXA Financial)
Lowest interest
3.55% 4.00%4.00%4.00%4.00%
Average, high and low-interest rates on GIC

The numbers are almost certain to change in the coming months, but a fixed-term GIC means that you can take advantage of these rates for a long time, even if inflation cools and rates drop.

Speaking generally, there are a few things to keep in mind when trying to get the best GIC rate:

  • Longer terms usually mean better interest rates
  • Non-redeemable GICs pay better than cashable ones
  • Higher deposit amounts may mean higher interest rates
  • The big five banks, meaning BMO, CIBC, RBC, Scotiabank and TD typically offer slightly low-interest rates on their GICs. Smaller providers may advertise higher interest rates to attract customers who do not already know them.

How do you get a GIC?

GICs are available from many banks, financial institutions and trusts. This includes all of Canada’s big five banks and many smaller banks. As long as they are insured by the Canada Deposit Insurance Corporation they will be safe. Credit unions may offer GICs as well. Note that they are not covered by the CDIC’s insurance, but should have similar protection via their provincial insurer like the Credit Union Deposit Insurance Corporation of B.C. or Financial Services Regulatory Authority of Ontario.

The CDIC provides a list of its members, which includes banks, federally regulated credit unions and trust companies.

The easiest way to buy a GIC is to see the top of this page. Begin shopping for and comparing the best interest rates on GICs.

Some of the most popular GIC providers include:

  • BMO
  • Canadian Western Bank (CWB)
  • Coast Capital
  • EQ Bank
  • HSBC
  • ICICI Bank
  • Meridian
  • Oaken Financial
  • Royal Bank of Canada
  • Scotiabank
  • Simplii Financial
  • Tangerine
  • TD Bank
  • Vancity

Investors often buy GICs through their existing banks. When you have an account GICs are quick to open and can be done in person or remotely.

GICs may also be purchased online through a brokerage or through a trusted financial advisor.

Start working with a financial advisor today

Speak with an expert now

What is the penalty for withdrawing a GIC early?

For non-redeemable GICs, investors may be bound by contract and unable to withdraw until the date of maturity. If the financial institution agrees to break the contract, which they are under no obligation to do, the investor will likely be charged a penalty and forgo some or all interest. Check the terms and conditions of your GIC or speak with your banker or financial advisor to see if it’s possible.

For cashable GICs, there isn’t a penalty. Investors are allowed to withdraw funds early and receive reduced interest. How much will depend upon how long the GIC was held.

What happens when a GIC reaches maturity?

When a GIC reaches maturity, the principal is returned to the investor along with accrued interest. At this point, they may spend it, move it into a savings or chequing account or reinvest it.

One nice strategy can be to ladder your GIC investments in which you hold multiple GICs with different terms. At the end of each year, you have the flexibility and can purchase another GIC or shift that money into a different investment.

What is GIC laddering?

The GIC laddering strategy offers investors increased financial flexibility and lets them take advantage of the higher interest on 5-year GICs.

Rather than buying a single large GIC, an investor will buy 5 smaller ones with 1, 2, 3, 4 and 5-year terms. At the end of each year, as one expires, they then purchase a 5-year GIC.

Here is what it looks like in practice:

screenshot 2022 09 07 at 151637
How GIC laddering works

Laddering affords investors valuable liquidity. Every year a fifth of the principal and interest becomes available to reinvest.

What happens to a GIC if the holder dies?

In the event of the death of the holder, a GIC will pass to the surviving owner if it was held jointly. Maturity and terms should remain unchanged.

Otherwise, the provider may suspend paying the GIC until contacted by the new beneficiary or the deceased’s estate. Survivors should contact bank that issued the GIC directly.

GICs vs Mutual Funds

GICs and mutual funds are both relatively-low risk investment vehicles. GICs are considered an extremely safe and secure investment: the principal is guaranteed, and they are insured by the Canadian government.

Mutual funds on the other hand are regarded as higher risk than GICs, but lower than many other investment types. They provide investors with better rates of return by tying the investment directly to the stock market but not too volatile individual stocks.

Mutual Funds: Pros & Con

  • Better returns: mutual funds historically outperform GICs
  • Liquid: Sell mutual funds at any time without paying a penalty.
  • Managed: Mutual fund managers balance a basket of securities to mitigate risk while targeting solid returns
  • Saves time. Investors need not delegate time monitoring their investment because this responsibility is taken care of by fund managers.
  • Exposure to the market. A downturn in the stock market will negatively impact returns.
  • Lack of control: Investors are not able to directly manage their investments – this responsibility is handed over to fund managers.
  • Fees: Investors will be required to pay an overhead cost for the management of their funds.

GICs: Pros & Cons

  • Safer than mutual funds: your principal is insured by the Canadian government
  • Quick and easy to open
  • Guaranteed, fixed return
  • The lower average rate of return
  • Funds locked

GICs vs bonds

GICs and bonds are both popular choices for low-risk, long-term investments. Bonds may represent more risk than ultra-safe GICs, but that risk can be mitigated by a bond fund which pools together a mix of bonds and other securities. Bond funds are available in mutual funds and ETFs.

Here are some reasons to consider one over the other.

GICs advantages

  • Guaranteed return
  • Insured by CDIC
  • Easy to buy
  • Shorter maturities

Bond advantages

  • Historically very stable, but very recent performance has been bumpy
  • Liquidity: Unlike a GIC which locks in your principal, you can resell your bond on the secondary market.
  • Diversity: there are many more options to choose from including those from national governments, corporations, and local governments
  • May pay better than bonds
  • More volatile and not guaranteed

Ready to compare GICs rates? You can at the top of this page or by connecting with a financial adviser.

Start working with a financial advisor today

Speak with an expert now
Contracts for difference (CFDs) are complex instruments. The nature of leverage means that they are high-risk investments with the potential to lose money quickly.
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Alexandre Desoutter

Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.