Comparing the offerings at big banks can be difficult when they all seem to offer the same products and services. They also have large branch networks and thousands of ATMs across the country.
Here’s an overview of the rates on non-redeemable GICs the two banks offer on one- to five-year terms as of June 21 (with a minimum investment of $5,000):
While neither bank offers the best GIC rates in Canada, both offer similar rates.
Both banks also offer a variety of market-linked (also called index-linked) GICs, which are designed to track specific stock indices (such as the S&P/TSX 60 Index or S&P 500 Index) or certain sectors (such as banking and utilities). The potential for returns depends on the index the market tracks and the return is capped at a certain amount. But if the index doesn’t perform well, you won’t lose money and the guaranteed interest rate is nominal compared to regular GICs.
TD offers four of this type of GICs while RBC offers five. The minimum investment at TD is $500 for RRSP, RRIF, or RESP accounts, and $1,000 for TFSA or non-registered accounts. At RBC, the minimum investment is $1,000 for all types of accounts. The terms for these types of GICs vary between two and five years.
High-interest savings accounts
TD and RBC both have a variety of high-interest savings accounts. Of all of the accounts they offer, the TD High Interest Savings Account and the RBC High Interest eSavings accounts have the best rates (as of April 10):
The TD High Interest Savings Account has a tiered rate. In this case, you must have a balance of $5,000 or more in order to receive interest. However, the RBC account doesn’t require a minimum balance and you’ll get the same rate, whether you have $5 or $50,000 in your account.
Although it was a tough fight, RBC comes out on top because it offers slightly better regular GIC rates and its best high-interest savings account doesn’t have a tiered rate.