But when you narrow it down to GICs and high-interest savings accounts, there are some differences, especially between BMO Bank of Montreal and CIBC.
Both banks require a minimum investment of $1,000 to invest in GICs with a term of one year or more. As of April 17, these are the rates they offer on non-redeemable GICs for terms of between one and five years:
BMO offers much better rates than CIBC. However, they’re not the best GIC rates in Canada as a number of other financial institutions offer higher rates.
BMO and CIBC also offer a number of market-linked GICs, which can provide you with the possibility of higher investment returns without the possibility of losing any money. However, there are a couple downsides with market-linked GICs: Your returns are capped at a certain amount even if the index or stocks the GIC tracks do really well. And if the market drops, your principal is guaranteed and you may receive a nominal return, which will be lower than what you would have received had you chosen a regular GIC.
CIBC offers five of these types of GICs with a minimum investment of just $500. There are only three- and five-year terms available. On the other hand, BMO offers eight market-linked GICs with terms of between 1.5 and five years. However, the minimum investment at BMO is $1,000.
High-interest savings accounts
The two banks also have a number of different savings accounts. As of April 17, the BMO Savings Builder account and the CIBC eAdvantage Savings Account offer the best rates. But each account comes with a catch.
The basic interest rate on the BMO Savings Builder account is 0.2%. You can get an additional 1% (for a total of 1.2%) if you deposit $200 into the account every month. The CIBC eAdvantage Savings Account offers a rate of 0.5% but only if your balance is $5,000 or more.
The banks also offer other options. The BMO Smart Saver account has a rate of 0.4% no matter what your balance is and there’s no minimum monthly savings requirement. The CIBC Bonus Savings Account has a rate of 0.1% but your balance has to be at least $3,000.
This was an easy one to decide. BMO Bank of Montreal offers much better GIC rates, a wider selection of market-linked GICs, and one of its high-interest savings accounts actually pays a high rate of interest. Scotiabank takes on last week’s winner—RBC Royal Bank—in the next battle of the banks.
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Flickr: Chris Tyler