The best GIC rates in Canada have become more important to investors (as we enter late 2022) than they have been in decades.

Rising interest rates are making it much more rewarding to hold fixed income for the long term. With central banks beginning to make noise about pausing interest rate hikes, now might be the time to lock in a longer term GIC.  

Nothing wrong with a guaranteed 4.7% return!  (GIC = Guaranteed Investment Certificate).

We recommend EQ Bank’s GICs simply because they almost always have – or are tied for – the very best interest rate, but also because they offer by far the best platform and customer service out of all the online banks in Canada. 

All of the banks and credit unions in the GIC Rates Comparison below are online-only (you’ll notice none of the big Canadian banks are included) and EQ is simply Canada’s best online bank. Don’t fall for marketing tricks and teaser rates – stick with the bank that has had the long-term commitment to high interest rates.

Best Canadian GIC Rates Compared

Bank Name

1-Year GIC

2-Year GIC

3-Year GIC

4-Year GIC

5-Year GIC

Get Rates

EQ Bank

5.10%

5.10%

5.10%

5.00%

5.00%

Simplii Financial

4.50%

4.05%

4.10%

4.15%

4.20%

Tangerine Bank

4.85%

5.20%

5.10%

4.80%

5.00%

Motive Financial

4.49%

4.64%

4.70%

4.76%

5.00%

People's Trust

4.60%

4.75%

4.75%

4.75%

4.75%

Oaken Financial

4.40%

4.50%

4.50%

4.50%

4.65%

Hubert Financial

4.25%

4.75%

4.50%

4.75%

5.00%

Meridian Credit Union

4.10%

4.40%

4.50%

4.60%

4.70%

ICIC Bank

4.25%

4.30%

4.00%

4.00%

4.00%

Canadian Tire Bank

3.55%

4.00%

4.10%

4.15%

4.50%

Best 1-Year GIC Rates in Canada

EQ Bank – 5.10%

MDJ Rating: 4.9/5

Full Review: EQ Bank Review

Tangerine Bank – 4.85%

MDJ Rating: 3.8/5

Full Review: Tangerine Bank Review

Best 3-Year GIC Rates Compared

EQ Bank – 5.10%

MDJ Rating: 4.9/5

Full Review: EQ Bank Review

Motive Financial – 4.70%

MDJ Rating: 3.8/5

Full Review: Motive Financial Review

Tangerine Bank – 5.10%

MDJ Rating: 3.8/5

Full Review: Tangerine Bank Review

Best 5-Year GIC Rates

EQ Bank – 5.00%

MDJ Rating: 4.9/5

Full Review: EQ Bank Review

Motive Financial – 5.00%

MDJ Rating: 3.8/5

Full Review: Motive Financial Review

What is a GIC?

The term GIC is short for Guaranteed Investment Certificate.  

As an investment, it belongs in the same fixed-income family as bonds.

GICs are very safe investments as they are basically short-term loans to banks, and are insured in Canada by the Canadian Deposit Insurance Corporation (CDIC) if you use a major Canadian Bank such as EQ Bank. Even if one of Canada’s banks went bankrupt (incredibly unlikely) the CDIC would step in and pay you your principal back (up to $1 Million per account).

When looking at fixed income investments, the idea is that you are loaning an entity money, and in return, that entity is going to give you that money (called “the principle”) back, plus interest payments periodically. 

So if you buy a government bond, you’re essentially loaning money to the government.  When you buy a corporate bond (more risky) you’re loaning money to that company.

And when you buy a GIC, you are making an agreement with a bank to pay you your money back a number of years from now, plus give you a specific interest.

So if you were to invest in a 5-year GIC from EQ Bank right now for $100, you would earn $5 each year, and then in five years you’d get that money, as well as your initial $100 back as well.

Types of GICs in Canada

You can put GICs in pretty much any bank account or investment account in Canada (including RRSPs, TFSAs, RESPs, or basic bank accounts).  The main types of GICs in Canada include:

The Classic Non-Redeemable GIC: The vast majority of GICs that Canadians invest in are non-redeemable GICs.  All that phrase means is you can’t cash the FIC out early and redeem your cash.  You are locked in to getting your specific interest rate payment annually, and then your money back at the end of that period.

This type of GIC is also commonly referred to as a “fixed GIC”.

A Cashable Redeemable GIC: The much less common cashable GIC is kind of the exact opposite of the non-redeemable GIC.  It allows folks the ability to withdraw the initial money they put in (the principle) before the term is up.  In order to get this neat little feature though, you are going to get paid a much lower interest rate than you would with the Classic GIC option.  

Honestly, rather than go through the trouble of a cashable GIC, I’d just toss my money in one of our best high-interest savings accounts.

Laddered GIC: The phrase “laddered GIC” is just something that bankers like to say to impress people.  All it really means is that a person can set up a series of non-redeemable GICs so that they will receive money each year.

For example, If I have $100,000, I might put $20,000 each in a 1-year GIC, 2-year GIC, 3-year, GIC, 4-year GIC, and 5-year GIC.  In this way, I know that I will have $20,000 (plus interest) coming to me each year.

Market Linked GIC: This type of GIC is a niche produce that is linked to the performance of an underlying asset.  It’s kind of like using the GIC structure to make a bet on something else (usually the stock market).  Most people can safely ignore these types of GICs.

Variable Rate GICs: Again, another niche type of GIC that most people can probably avoid.  This GIC’s return will go up and down with interest.  It’s like the reverse of a variable rate mortgage.

GICs in RRSPs and TFSAs vs Non Registered GICs

The GIC is a very flexible investment product.  You can invest in a GIC outside of any type of special registered account, and you can also place it within an RRSP, TFSA, RESP or other registered accounts.

Our preferred GIC provider, EQ Bank, even goes so far as to incentivize you to use their GIC inside your RRSP and TFSA by offering special GIC rates on those products:

Term

Registered (TFSA & RRSP) GIC Rate

Non-Registered GIC Rate

3 Months

2.65%

2.65%

6 Months

3.50%

3.50%

9 Months

3.75%

3.75%

1 Year

5.10%

5.10%

15 Months

5.10%

5.10%

2 Years

5.10%

5.10%

27 Months

5.10%

5.10%

3 Years

5.10%

5.10%

4 Years

5.00%

5.00%

5 Years

5.00%

5.00%

6 Years

4.90%

4.90%

7 Years

4.90%

4.90%

10 Years

4.90%

4.90%

Obviously the big bonus to putting GICs into a registered account (versus a GIC in a non-registered account) is that the interest gained on the investment in a TFSA or RRSP will not be taxed. 

This is especially important for GIC income because the interest income that they produce is taxed at 100% of your normal tax rate (it’s as if you earned the money a job) whereas dividends and capital gains are taxed at much lower rates.

Are GICs Insured and Safe Investments?

GICs are safe investments in two different ways.

1) GICs are relatively safe in terms of investment risk. 

As a fixed income investment, GICs are considered substantially safer than stocks. If a company were to go bankrupt (again, we’re talking super safe Canadian banks here) GIC holders would be some of the first ones paid out. 

People who owned shares of a bank on the other hand, would be the last ones to get paid anything. (This is why equities like shares generally have higher long-term returns than fixed income investments.)

2) GICs are safe due to CDIC insurance.

The Canadian Deposit Insurance Corporation (CDIC) is an entity that the Canadian government set up to protect investors and to give people confidence when it comes to investing money in Canada. Canadian banks (notably not credit unions such as Oaken or Hubert) have their GICs fully insured by this Canadian government company – up to $100,000 per account.

So if you have $100,000 in GICs in your RRSP, $100,000 in GICs in your TFSA, and $100,000 in GICs in basic non-registered bank account – then you are fully insured on $300,000. If you do the same thing again at a second bank, you have $600,000 covered.  

If your partner uses the same strategy – you now have over a million in fully insured GICs – and frankly you probably have too much money in fixed income investments!

So even if a bank were to go completely bankrupt and not be able to pay you your money, this branch of the Canadian government would step in to cover your losses – up to $100,000 per account.

Canadian Credit Unions have a similar government-ran insurance, but they are governed by provinces – not the federal government. That means that GICs from credit unions are considered almost as safe as those from Canadian Banks (such as EQ Bank and Tangerine) – but since the provincial deposit guarantee corporations aren’t as big as the CDIC (which is ran by a whole country instead of a province).

How to Open a GIC Account and Buy a GIC

There are a wide variety of ways to open a GIC account in Canada. You can buy a GIC within any registered or non-registered account, so basically anywhere that allows you to do that will allow you to buy a GIC.

As you can tell from our Canadian GIC Comparison chart at the top of this article, we’re fans of online banks and credit unions. They always have the best GIC rates in Canada because they have no bricks-and-mortar costs to subsidize with fees on their products.  

That said, you can buy a GIC using any of Canada’s chartered banks – from the biggest company in Canada (RBC) to relatively small banks and trust companies.  As mentioned above, you can use credit unions or caisses populaires to buy GICs – but remember they are covered by provincial governance, not by the CDIC.

Canada’s online discount brokerages will also allow you to purchase GICs, but the variety you’ll have to choose from depends on which online broker you use.

For the most part it’s quite easy to open an account and buy a GIC at any of these institutions since it’s such a well known product.

GICs vs Bonds and Other Fixed Income

Of course GICs aren’t alone when it comes to investment types that fit under the category of “fixed income”.  You can check out our in-depth article on bond ETFs vs GICs vs high interest savings accounts for a close comparison of fixed income products.

Generally speaking bonds, GICs, and high interest savings accounts have different levels of liquidity, but they all fit under the same overall big picture.  They are very safe investments with correspondingly low levels of anticipated returns compared to equities.

As of late 2022 I think the mid-term GICs specifically have raced out the best value when compared to the current rates offered on federal and provincial bonds, as well as high interest savings accounts.  

Canadian GICs FAQ

Are Canadian GICs Worth It?

Yes – Canadian GICs are worth it in 2022!

The simple fact is that the super low interest rates of the past 15 years were very difficult for low-risk savers.  

There’s a reason why the phrase “TINA” – There Is No Alternative – was often cited as a big reason for why stock valuations got so high over the past decade.

As the Bank of Canada raises its key interest rate, Canadian banks will likely raise their GIC rates.  As we head into late 2022, we’re seeing higher GIC rates than Canadian investors have enjoyed since 

In order to get the best bang for your buck it’s important to compare GIC rates across Canada before buying your GIC.

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Kyle Prevost

Kyle Prevost is Canada's Top Personal Finance Teacher and an author/speaker/advisor when he is not in his classroom. His writing has been featured across Canada’s most-read publications. When he isn’t nerding out about P/E ratios or MERs, you can find Kyle on a basketball court or in a boxing ring trying to recapture something he isn’t sure that he had in the first place.
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