Best GIC Rates in Canada 2023

The best GIC rates in Canada have skyrocketed in 2022 and don’t look to be trending downward any time soon in 2023. Guaranteed Investment Certificates (GICs) are excellent investments for folks that want the ultimate in safety and simplicity – or are saving for a short-term goal.  

Below you can find the latest top Canadian GIC rates. We have consistently recommended EQ Bank (see our EQ Bank Review) when it comes to GICs simply because they don’t use teaser rates (like Tangerine or other online banks) and they offer the most complete banking package of the options listed below.

Best Canadian GIC Rates Compared

Best 1-Year GIC Rates in Canada

Best 3-Year GIC Rates Compared

Best 5-Year GIC Rates

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.

Best GIC Rates For Registered RRSP 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:

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.

For 2023 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 Oaken GIC Rates the Best in Canada?

When we look at the best Canadian GIC rates for 2023 we see that Oaken GIC rates are good – but not great.

Oaken GIC rates have consistently been very solid over the years, but currently, they range from 4.4% on the one year GIC, to 4.6% on the five year GIC. When compared to our preferred option at EQ Bank, the one year GIC at EQ Bank is 5%, so you can see there is a decisive gap there.

I’m not sure why Oaken GIC rates are substantially lower than market leaders like EQ and Motive Financial right now. It must mean that their actuarial team believes that the Bank of Canada will look to lower rates sooner rather than later.

Are Canadian GICs Worth It?

Yes – Canadian GICs are worth it in 2023!

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 2023, we’re seeing higher GIC rates than Canadian investors have ever enjoyed.

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