Best Low Risk Investments in Canada Right Now

My general rule of thumb hasn’t changed much over the two decades I’ve been writing about investing: If you plan to use your money within the next five years, then it doesn’t belong in the stock market. You’re usually best sticking to capital-preserving options, including products covered by the Canada Deposit Insurance Corporation. That means things like Canadian high interest savings accounts and shopping around for the best GIC rates.  

If you need your money within the next few years, I prefer CDIC-Insured HISAs, GICs and Government of Canada T-bills over stocks. The shorter your timeline, the less sense it makes to take equity-market risk.

For most Canadians, our preferred low-risk option for immediately accessible cash is a competitive HISA. If you can lock the money away, a GIC or T-bill may offer a better return.

But if you have a long investment horizon, the definition of “low risk” changes. A diversified portfolio of high-quality stocks or ETFs will fluctuate in value, but has historically offered much greater potential to grow your money and outpace inflation than cash or GICs.

For long-term investors, keeping everything in “safe” investments can actually create a different kind of risk: not having enough purchasing power later.

The best low-risk investment really depends on when you need the money:

Time Horizon	Best Options
Within 1 year	HISA, cashable GIC, T-bills
1–3 years	GICs, HISA, T-bills
3–5 years	GIC ladder, T-bills, short-term fixed income
5–10+ years	Low-volatility ETFs, high-quality stocks, diversified ETFs
For guaranteed retirement income	Annuities

“For GICs and HISAs, I recommend EQ Bank, our top-rated Canadian bank and consistently one of the most competitive options for rates. For T-bills, bonds, stocks and ETFs, Qtrade is our top-rated Canadian online broker especially right now with their exceptional promo offer:

What Does “Low Risk” Actually Mean?

Instead of treating risk as a one-dimensional question of “am I going to lose all my money?”, it’s better to take a broader view. When evaluating investments for our own personal finances, we typically consider four different types of risk:

1. Principal risk

Could you lose the money you originally invested?

2. Market risk

Could the investment temporarily fall in value?

3. Liquidity risk

Can you get your money when you need it?

4. Inflation risk

Could your money lose purchasing power over time?

This is important because an investment can be very safe in one respect while carrying meaningful risks in another. GICs and high-interest savings accounts, for example, have very low principal risk, but over a long enough time horizon, inflation and opportunity cost can become more important.

ETFs and dividend stocks, on the other hand, carry substantially more market risk and can lose significant value in the short term. However, they have historically offered much greater long-term growth potential. For an investor with a long time horizon, they can be a relatively low-risk way to build wealth when compared with the risk of failing to grow your purchasing power.

Best Safe Investments Compared

Here’s how the main low-risk investment options available to Canadians compare. As discussed above, there’s more to risk than simply whether you might lose your initial investment, so we’ve compared each option based on its principal risk, liquidity, ideal time horizon, and what it’s best used for.

For a detailed comparison of the products available in Canada, click on the investment type that best fits your situation.

Investment	Best For	Principal Risk	Liquidity	Time Horizon
HISA	Accessible cash	Very Low	Excellent	0-2 Years
GIC	Guaranteed returns	Very Low	Low – Medium	1-5 years
T-bills	Short-term government-backed savings	Very Low	High	0-2 years
Cash ETF	Brokerage-held cash	Low, not guaranteed	High	0-2 years
Bond ETF	Intermediate-term income	Low-Medium	High	3–5 years (some target-maturity ETFs extend to 7 years)
Low-volatility ETFs	Long term growth	Medium	High	5-10+ years
Quality dividend stocks	Long term growth	Medium-High	High	10+ years
Annuities	Retirement income	Very Low	Low	Steady retirement income

How CDIC insurance works:
Eligible deposits at CDIC member institutions are automatically insured up to $100,000 per insured category, per member institution. That doesn’t simply mean “you can only have $100,000 insured at a bank.” Different ownership and account categories can receive separate coverage.

For example, if you hold $100,000 within a TFSA and another $100,000 within an RRSP at the same institution, both accounts are fully and independently insured for a total of $200,000.

High-Interest Savings Accounts (HISAs)

A high-interest savings account (HISA) is amongst the safest investments AND they offer instant access to your cash (no locking it in for a specific period of time).

Big banks offer dismal interest rates of 0.1-0.5% on their savings accounts, so your best bet is to look at Canada’s best online banks, which offer no-fee, high interest rate accounts.

The best high-interest savings account in Canada is the Personal Account from EQ Bank, which offers 2.75% interest and has zero fees. You can learn more about this account and other offerings from EQ in our EQ Bank Review. 

• Best For: Money you may need immediately.
• Risk: Very low when eligible for CDIC coverage.
• Liquidity: High.
• Expected Return: Varies per bank, but predictable and consistent.

MDJ Verdict: Our preferred choice for emergency funds and short-term savings

GICs

Guaranteed Investment Certificates (GICs) are secured investments. You’re basically lending money to the issuer for a set time period, at which point you’re guaranteed to get your full investment back. In the meantime, you’re guaranteed regular payments of interest on your loan. 

GIC interest rates are either fixed (they’ll stay the same no matter what) or variable (they’ll shift depending on the Prime interest rate). Fixed-rate GICs are a safer investment option because interest rates could fall, taking your variable GIC rates with them. And as of the start of 2026, that’s not a risk you want to take. 

EQ Bank offers fixed GIC rates of up to 4% (for 5 years) and a great 3.40% if you lock it up for just a year.

• Best For: Guaranteed returns.
• Risk: Very low when eligible for CDIC coverage.
• Liquidity: Medium.
• Expected Return: Varies per bank, but predictable and consistent.

MDJ Verdict: Our preferred choice for earning a guaranteed return on money you can afford not to touch.

Treasury Bills

Treasury bills, or T-bills, are loans to the Canadian government. They’re well known as safe investments because the government is near-guaranteed to pay back its debts. Canadian T-bills are sold at a discount and then redeemed at maturity at their face value.

They don’t pay interest in the meantime, but at maturity, you receive their full face value, with the difference between your purchase price and face value representing your return.

 While T-bills are lower yield than many other low risk investments, they have the benefit of being backed by the Government of Canada.

T-bills are easy to buy through your Canadian online broker. Qtrade, our preferred online broker, charges $1 per $1000 for T-bill purchases, from a minimum of $24.99 to a maximum of $250.

• Best For: Safest option for balances larger than CDIC coverage.
• Risk: Extremely low.
• Liquidity: High.
• Expected Return: Relatively low

MDJ Verdict: Great safety net option for high net worth investors.

Cash ETFs and Money Market Funds

Cash ETFs are funds that invest in short-term, high-quality investments such as government T-bills and deposits with major banks. They’re designed to provide a relatively safe place to park cash while earning interest, without locking your money away for a fixed term.

Unlike a savings account, cash ETFs trade on the stock market, so you can buy and sell them through your Canadian online broker just like a stock or ETF.

They typically offer competitive yields, although the interest rate will fluctuate as market rates change. There’s also no CDIC coverage on the ETF itself, although the underlying holdings may be eligible for deposit insurance.

Cash ETFs are particularly useful when you want easy access to your money but don’t want it sitting idle in a low-interest chequing or savings account.

As long time MDJ readers already know, money market funds are low risk mutual funds that contain high-quality, short-term securities like Government Treasury Bills, debt instruments, or cash equivalents.

The basic idea behind these products is to pool together large amounts of money from Canadian investors (through ETFs you can buy and sell on a stock exchange) and then negotiate great high interest savings account rates.

• Best For: Parking large amounts of cash while keeping it readily accessible.
• Risk: Very low.
• Liquidity: High.
• Expected Return: Relatively low.

MDJ Verdict: A convenient option for investors looking to earn a competitive return on cash while keeping it readily accessible.

HISA vs Cash ETFs

	High Interest Savings Accounts	Cash ETFs
CDIC insurance	Usually Available	No
Liquidity	Excellent	Excellent
Brokerage required	No	Yes
Market value guarantee	Yes, if insured deposit	No
Fees	Usually none	MER
Best For	Banking / cash	Brokerage-held cash

While on the surface it may seem that HISAs are far superior, there are a few key distinctions to consider. HISA rates can change without notice, while Cash ETFs can provide a competitive yield with relatively little fluctuation in value. They also offer similar liquidity and flexibility, although Cash ETFs are held through a brokerage account and aren’t directly covered by CDIC insurance. In other words, you’re essentially trading a bit of security for the potential for slightly higher returns over time.

Bonds

Buying a bond is essentially lending money to the seller for a set time period in exchange for regular interest payments. They’re like GICs, only without the CDIC insurance.

Now, it’s important to understand two things about buying bonds as a low risk investment:

1) There is a massive range of bonds. An investor can buy bonds in anything from the clean water authority down in Florida, to bonds issued by massive companies like Apple. The vast majority of Canadians only really need to understand bonds from very safe entities like provincial/federal governments, or maybe the most stable companies such as Bell.

2) It is very rare these days for an investor to buy a single bond simply because the mechanics are quite cumbersome. Canada Savings Bonds used to be a popular option, but the federal government discontinued the program in 2017. Instead, when most people want to invest in bonds they use a bond ETF. You can see which bond ETFs I like best if you check out my best ETFs in Canada article.

Agencies like Moody’s and Standard and Poor’s monitor the quality of bonds and assign grades to help investors make informed decisions. 

Bonds can help protect your portfolio against stock market declines but this is not guaranteed either, as folks who owned bonds in 2023 can attest. That said, a bond ETF can lose money even when it holds high-quality government bonds. If interest rates rise, the market value of existing bonds generally falls.  

For a more in-depth look at different fixed income options, check out my article on bond ETFs vs High Interest Savings Accounts vs GICs.

• Best For: Investors with a 3–5 year horizon who can tolerate some market fluctuation. (Note: Stick to short-term bond ETFs to avoid interest rate traps).
• Risk: Low-medium.
• Liquidity: High
• Expected Return: Slightly better than HISA historically, but still low.

MDJ Verdict: A structurally more conservative medium term option than low volatility ETFs.

Low Volatility ETFs

Low volatility ETFs invest in stocks with historically smaller price fluctuations than the broader market. They’re still equity investments, so they can lose money, but the goal is to provide a smoother ride during market downturns while still allowing you to take advantage of long-term stock market growth.

Because they hold stocks, low volatility ETFs aren’t guaranteed to protect your money. They can still experience significant declines, and their lower volatility can also mean they lag the broader market during strong bull markets.

Low volatility ETFs are easy (and free!) to buy through your Canadian online broker, just like any other ETF. They can be particularly useful for investors who want the growth potential of equities but are uncomfortable with the larger swings of a traditional stock market ETF.

Investing in ETFs is obviously more complex than the other investments on this list, and the tradeoffs can vary considerably depending on what the ETF actually holds. As mentioned above, Cash ETFs prioritize stability and liquidity, while bond ETFs can offer more income but fluctuate with interest rates.

Low-volatility and diversified equity ETFs offer greater long-term growth potential, but can still fall significantly during a market downturn. If you’re considering ETFs, our in-depth guides to cash ETFs, bond ETFs, dividend ETFs, low-volatility and all-in-one ETFs explain the differences and tradeoffs in more detail.

• Best For: Investors who want equity growth with smaller-than-market swings.
• Risk: Moderate.
• Liquidity: High.
• Expected Return: Moderate.

MDJ Verdict: A good middle ground for investors who want to stay invested in stocks but have lower tolerance for volatility.

Low-Risk Stocks: Banks, Utilities and Wide-Moat Companies

Individual stocks can obviously fall sharply, and no company is immune from permanent losses. But some businesses have characteristics that make them considerably more defensive than others. That said, you just have to ask Bell (BCE) investors who thought they were getting a low risk investment over the years how that’s looking at the moment as their share price is down 50% since its 2022 peak.

Now, if I had to pick some mature businesses that I believe are low risk Canadian stocks, I would look at utilities, banks, and shares of other companies that pay out relatively high dividend yields. Even more so than the yield however, I’d be looking at the track record of dividend increases over the past several decades. For investors looking for another layer of protection, Canadian wide-moat stocks can be particularly attractive.

I achieved financial independence at a young age, thanks in part to being able to stay the course when times were tough in the markets. I weathered those storms because I had concrete conviction in my portfolio of dividend-paying stocks. You can check out my updated list of the Best Canadian Dividend Growth Stocks and my Dividend Kings List. 

You’ll find boringly simple companies such as:

• Canadian National Railway (CNR)
• Fortis Inc. (FTS)
• Emera (EMA)

Long time MDJ readers know I’ve benefited from investing in dividend-paying stocks for decades, including through some very difficult markets. That experience is one reason I place so much emphasis on the quality and durability of the underlying business rather than simply chasing the highest yield.

Over those years, I’ve really benefited from my personal relationship with Mike Heroux, and his unique platform for Canadian dividend investors called Dividend Stocks Rock. You can read my full review of Dividend Stocks Rock for more information.

• Best For: Competitive investing within a 5-10+ year horizon
• Risk: Medium, but significantly higher than the options above.
• Liquidity: High.
• Expected Return: Moderate to high.

MDJ Verdict: One of our preferred options for long-term investors willing to accept short-term market volatility.

Annuities

Annuities are different from most low risk investments on our list. An annuity is an insurance contract in which you pay a set sum in exchange for regular payouts in the future. Payment for an annuity either occurs in one lump sum or set monthly premiums during an accumulation period. 

Annuities are designed specifically for retirement-age investors and aren’t appropriate for everyone. During the accumulation period, the money you invest is illiquid and can’t be withdrawn without financial penalties. However, once the payout period begins, your income is guaranteed, either for a set amount of time, or for life, depending on your choice of annuity. 

• Best For:  guaranteed, lifelong income to cover fixed living expenses.
• Risk: Low.
• Liquidity: Very Low.
• Expected Return: Low.

MDJ Verdict: Great “peace of mind” asset that provides steady income, ideally as a part of a larger portfolio.

A Balanced Portfolio is The Safest Long Term Choice

A diversified portfolio is usually safer than relying on any one investment. The goal isn’t to eliminate market volatility, but to make sure you have enough low-risk assets to cover your short-term needs while allowing your long-term investments to grow.

Higher-risk investments generally offer greater potential returns over the long term, while low-risk investments can be useful for short-term savings, weathering stock-market volatility, and providing stability within a diversified portfolio.

People have different risk tolerance and different investment time horizons. So everyone has their own unique balance. Be aware of your investment needs and make sure that your portfolio reflects them.

How Much Low-Risk Investments Should You Own?

While there’s no magic percentage number that works for everyone, a good starting point is to keep enough low-risk investments to cover your near-term spending needs and financial commitments.

For most investors, that means having an emergency fund plus enough money in cash, GICs or other low-risk investments to cover expenses or planned purchases over the next 1–5 years. Money you won’t need for five years or more can generally take more investment risk and be allocated toward long-term growth.

The important thing is to avoid holding more low-risk assets than you actually need simply because they feel safer. Once your short-term needs are covered, the risk of not growing your money can become more important than the risk of temporary market losses.

What Should I Do With $10,000?

If you have around $10,000 sitting in cash, the best place for it depends primarily on when you expect to need the money.

If this is your emergency fund or you may need it within the next year or two, I’d keep things simple. A competitive high-interest savings account is the preferred option because you can access the money when you need it while still earning solid interest. If you know you won’t need some or all of the money for a specific period, a GIC or T-bill may be worth considering for a potentially higher return.

If you don’t expect to need the $10,000 for at least five years, take a different approach. Keeping the entire amount in a HISA or GIC protects you from short-term market losses, but it also leaves you exposed to inflation and the opportunity cost of not investing for growth.

For a long-term goal, I’d generally be more comfortable putting some or all of the money into a diversified all in one ETF or a selection of high-quality stocks, depending on your overall portfolio and tolerance for market fluctuations.

The key is not how much money you have, but when you’ll need it. There’s little benefit in taking stock-market risk with money you’ll need next year, but there can be a substantial cost to keeping long-term investment money in cash for decades.

The key takeaway: It’s not how much money you have, but when you’ll need it.

What Should I Do With $100,000 or More?

With $100,000, the same basic rule applies: your time horizon matters more than the size of the investment. However, having a larger amount of money makes diversification and asset allocation much more important.

If you need the money within the next one to three years, prioritize capital preservation. A combination of a competitive HISA, GICs and Government of Canada T-bills can provide safety while allowing you to earn a reasonable return. If you keep a large amount in deposits, remember that CDIC coverage is generally limited to $100,000 per insured category at each member institution, including principal and interest.

If the $100,000 is intended for a long-term goal such as retirement, it makes much less sense to leave it entirely in cash or GICs. Instead, I’d generally prefer a diversified portfolio of ETFs or high-quality stocks. The appropriate mix depends on your existing investments, time horizon and ability to tolerate market declines.

There is no magic investment that makes $100,000 both completely safe and capable of producing high returns. The goal is to take only as much risk as your time horizon requires.

For example: If you need $100,000 for a home purchase in 18 months, we’d treat it very differently from $100,000 you’re investing for early retirement at 40 or 50.

$100K needed in 2 years or less	$100K invested for 10+ years
HISA	Diversified equity ETFs
GIC	Low volatility ETFs
T-bills	High quality stocks
Protecting capital is the priority	Long-term growth is the priority
Avoid significant risk	Accept short-term volatility

Canadian Low Risk Investments FAQ

Are There Really Safe Investments in Canada with Good Returns?

If you’re hoping there’s a low-risk investment that quietly delivers outsized returns with zero downside, I’ll save you the frustration: that magic investment doesn’t exist.

The good news is that Canadians have plenty of excellent low-risk options. If you need your money soon, a competitive HISA is our preferred choice for keeping it safe and accessible. If you can afford to lock it away, GICs and T-bills can offer excellent principal protection and predictable returns.

For money you won’t need for five years or more, I’d start looking beyond guaranteed investments. Low-volatility and diversified ETFs, as well as high-quality dividend stocks, introduce more short-term market risk but offer substantially greater long-term growth potential.

The key is matching the investment to the job. Money you need next year shouldn’t be exposed to stock-market risk, while money you won’t need for decades probably shouldn’t spend its entire life in a savings account.

For short-term savings, check out our top-rated HISA at EQ Bank. If you’re ready to invest for the longer term, Qtrade is our top-rated Canadian online broker and provides access to T-bills, bonds, ETFs and stocks.