Guaranteed Investment Certificates (GICs) in Canada
A Guaranteed Investment Certificate (GIC) is a deposit product that pays a fixed or variable interest rate over a set term — typically 30 days to 5 years. Your principal is guaranteed at maturity, making GICs one of the lowest-risk savings tools available to Canadians. GIC interest is taxable in the year it is earned, and deposits at CDIC-member institutions are protected by the Canada Deposit Insurance Corporation up to $100,000 per insured category.
GICs became significantly more attractive after the Bank of Canada’s rate hiking cycle in 2022–2023. Even as rates have eased, 1-year GICs at online banks and credit unions continue to offer 3.5–5.0% — far above big bank savings accounts and comparable to short-term government bonds without the complexity.
How GICs Work
When you buy a GIC, you deposit a lump sum with a financial institution for a fixed term. At maturity, you receive your original deposit plus the agreed interest. The key variables:
| Variable | What It Means |
|---|---|
| Term | How long your money is locked in — from 30 days to 5 years |
| Rate | The guaranteed interest rate, fixed for the term |
| Type | Cashable vs non-redeemable (see below) |
| Compounding | Annual, semi-annual, monthly, or at maturity |
| Institution | Bank, credit union, or trust company |
GIC rates are quoted annually. A 1-year GIC at 4.5% on a $10,000 deposit earns $450 in interest. If compounding is at maturity, you receive $10,450 when the GIC matures.
GIC Interest and Taxes
GIC interest is taxable as ordinary income in the year it accrues — not necessarily the year you receive it. For multi-year GICs, you report interest annually on your T5 slip even if you have not yet received the cash. Holding GICs inside a TFSA or RRSP eliminates or defers this tax burden, making registered GICs far more efficient for most savers.
2026 GIC Rates — Major Providers
Rates as of June 2026. Online banks and credit unions consistently beat the big banks by 0.5–1.5 percentage points.
| Provider | 1-Year | 2-Year | 3-Year | 5-Year |
|---|---|---|---|---|
| EQ Bank | 4.50% | 4.25% | 4.10% | 3.95% |
| Oaken Financial | 4.45% | 4.20% | 4.05% | 3.90% |
| MAXA Financial (CU) | 4.40% | 4.20% | 4.00% | 3.85% |
| Peoples Trust | 4.35% | 4.15% | 3.95% | 3.80% |
| Haventree Bank | 4.30% | 4.10% | 3.90% | 3.75% |
| TD Bank | 3.00% | 2.80% | 2.75% | 2.70% |
| RBC | 2.95% | 2.75% | 2.70% | 2.65% |
| BMO | 2.90% | 2.70% | 2.65% | 2.60% |
| Scotiabank | 2.85% | 2.65% | 2.60% | 2.55% |
Rates change frequently — always compare before purchasing. See best GIC rates in Canada for current rankings.
Cashable vs Non-Redeemable GICs
The most important GIC decision is whether to buy a cashable (redeemable) or non-redeemable GIC.
| Feature | Cashable GIC | Non-Redeemable GIC |
|---|---|---|
| Early access | Yes, after 30–90 day lock-in | No (or with penalty) |
| Interest rate | 0.2–0.5% lower | Higher |
| Best for | Emergency fund overlap, uncertain timelines | Known fixed timelines |
| Rate risk | Low — you can exit if rates rise | Locked in for full term |
Rule of thumb: Use cashable GICs when you might need the money before maturity. Use non-redeemable GICs when you are certain about your timeline and want the higher rate. For most long-term investors, non-redeemable GICs inside a TFSA or RRSP offer the best after-tax return.
CDIC Insurance — How Safe Are GICs?
GICs from CDIC-member institutions are protected up to $100,000 per insured category:
- Deposits in your name (chequing, savings, GICs)
- Joint deposits
- RRSP deposits
- TFSA deposits
- RRIF deposits
This means a single depositor can have well over $100,000 protected across multiple registered accounts at the same institution. Credit union GICs are not covered by CDIC — they are protected by provincial deposit insurance (DGCQ in Quebec, DICO in Ontario, CUDIC in BC), which varies by province but is generally comparable.
GIC Laddering — Managing Rate Risk
GIC laddering staggers your GICs across multiple terms so a portion matures every year. Instead of putting $50,000 into a single 5-year GIC, you buy five $10,000 GICs maturing at 1, 2, 3, 4, and 5 years.
Benefits:
- Annual access to a portion of your savings
- Reinvest at prevailing rates when each GIC matures
- Reduces the risk of locking all savings in at a low-rate moment
- Over time, all GICs earn near 5-year rates while maintaining annual liquidity
When each GIC matures, reinvest into a new 5-year GIC to maintain the ladder. See the full GIC laddering strategy guide for examples and calculations.
GICs vs HISAs
Both GICs and high-interest savings accounts are safe, CDIC-insured savings vehicles. The choice depends on timeline and flexibility.
| Factor | GIC | HISA |
|---|---|---|
| Rate | Higher (locked in) | Lower (variable) |
| Flexibility | Locked until maturity | Withdraw anytime |
| Rate risk | Protected from drops | Rate can fall anytime |
| Best for | Known future expenses, retirement income | Emergency fund, short-term savings |
GIC rates are typically 0.5–1.0% higher than HISA rates at the same institution. If you have certainty about when you will need the money, a GIC usually wins on return. For emergency funds, a HISA is the right choice.
GICs Inside Registered Accounts
Holding GICs inside registered accounts eliminates or defers tax on interest:
- TFSA GICs — Interest is completely tax-free. Best option for most Canadians with available TFSA room.
- RRSP GICs — Interest is tax-deferred until withdrawal. Useful for higher earners expecting a lower tax rate in retirement.
- RRIF GICs — Common retirement income strategy: pair GIC laddering with RRIF minimum withdrawals to ensure predictable income.
Not all institutions offer registered GICs. EQ Bank, Oaken Financial, and most credit unions accept TFSA and RRSP GIC transfers.
Start Here
- GIC Guide Canada 2026: Rates, Types, Laddering & Where to Buy
- Best GIC Rates in Canada 2026
- GIC Calculator Canada 2026
- How Much Does $10,000 Earn in a GIC in Canada?
GIC Safety & Basics
- Are GICs Safe in Canada?
- Can You Lose Money in a GIC in Canada?
- GIC Minimum Deposit by Bank in Canada 2026
Types of GICs
- Cashable vs Non-Redeemable GICs: Which Should You Choose?
- Market-Linked GICs Explained: Are They Worth It?
- Term Deposit vs GIC in Canada 2026
- Business GICs in Canada