better choices made
to Canada’s top financial institutions
Natasha Macmillan, Business Unit Director - Everyday Banking
Highest GIC interest rates (non-redeemable)
- 1 year GIC: 5.10% at EQ Bank
- 2 year GIC: 5.00% at MCAN Wealth
- 3 year GIC: 5.00% at Oaken Financial
- 4 year GIC: 4.65% at MCAN Wealth
- 5 year GIC: 4.70% at MCAN Wealth
Best non-registered 5-year GIC interest rates
5-year GIC rates in Canada
Why invest in a GIC?
As the name indicates, what people love about GICs is that the principal is guaranteed to be returned to you, which means you’ll never lose your initial investment and always realize returns in the form of interest. Unlike more volatile investments, such as stocks or ETFs, GIC investors are not exposed to the possibility of a loss due to market fluctuations. GICs generally don't hold the promise of very high returns, however, but are considered safe, conservative investments.
Due to the nature of GICs, they’re particularly useful if:
- You have a short investment horizon (need access to your cash soon for an upcoming retirement, home purchase, wedding etc. and can’t risk any losses to your initial deposit)
- You don’t want to be tempted to spend your money (GICs lock away your cash for a set term)
- You don’t want to take on any investment risk in the stock market.
Should I invest in a fixed or variable rate GIC?
Fixed rate GICs, the most well-known GIC product, promise a defined amount of interest payable at specified periods during the term proving to be very low risk. This allows you to predict exactly how much you will earn over your desired term. On the other hand, variable rate GICs have rates that may change throughout the term which are dependent on a fluctuating interest rate benchmark, usually the financial institution's Prime rate. Therefore with variable rate GICs, you can benefit from higher interest rates when the Prime rate increases, but you take the risk when interest rates drop.
How long should I lock in a GIC for?
As with all investments, your decisions need to be geared toward your goals. If you need access to your money soon, choose a short-term GIC or a high-interest savings account. If you’re in it for the long haul and don’t mind committing your cash for several years, GIC terms anywhere from 1 to 10 years are available.
Can I get more than a 5% GIC in Canada?
Competition between banks for the best GIC interest rate is extremely high right now. GICs with a 1-year term are paying as much as 5.25% and 5.15% at financial institutions including Oaken Financial and MCAN Wealth. For GICs with a 5-year term, 4.70% and 4.35% are available from MCAN Wealth and Oaken Financial respectively.
What will GIC rates be in 2024?
With the upward movement in the Bank of Canada’s overnight target rate in 2023, GIC rates in Canada have seen an increase. In 2022 the best 5-year non-registered GIC rates were closer to 3%, whereas today they are near 5%. We do expect these rates to hold in 2024. Economists are now forecasting that the central bank could start cutting its trend-setting interest rate as early as the spring, and throughout 2025. Should this occur, interest rates for deposits and GICs will also decrease.
What is the difference between CDIC versus Provincial GIC insurance?
Provincial insurance is quite similar to the federal insurance provided through the CDIC. The differences between the two are quite small, ranging only slightly in their policies and figures of insurance rates. Each province also offers different policies from the next one. Provincially-insured GICs are insured by deposit insurance plans of their respective province.
What are some alternative investment options to GIC?
GICs are a great savings vehicle if you are looking to invest your money at no risk. However, depending on your risk profile and whether you would be needing the funds you want to deposit sooner than anticipated, there may be other investment products better suited for you.
High-interest Savings Accounts
Similar to a GIC, a high-interest savings account is a safe investment vehicle where you deposit your cash in a bank account that pays interest with no risk of losing any money. Unlike GICs, however, high-interest savings accounts let you access your money at any point with no restrictions on withdrawals, which makes them great for storing away an emergency fund or general short-term savings. You can compare some of Canada's best high-interest savings accounts using our comparison tool.
A robo-advisor can be a great option for investors who are comfortable with taking some financial risk for higher potential returns but also don’t know how (or want) to manage their own portfolio. With a robo-advisor, you won’t have to do any of the work or pay high fees, as portfolios are managed, rebalanced, and maintained in an automated fashion without active managers. You can browse our list of the best robo-advisors in Canada to find the right option for your financial needs.
An online brokerage is on the opposite end of the investing spectrum compared to GICs. A digital trading platform for the DIY investor who wants to buy and sell shares of individual stocks and ETFs, an online brokerage is for investors who are comfortable with taking investing into their own hands and those with longer-term investment horizons.
What is the highest paying GIC rate in Canada?
As of February 2024, the highest paying GIC rates in Canada currently range from 5.20-5.55% Higher rates are typically offered by challenger banks, digital banks and credit unions. These banks can offer more compelling rates because they have fewer costs than traditional banks who have in-person branches and other costs.
Why are 1 year GIC rates so high?
1 year GIC rates are the highest right now because of the inverted yield curve - which means short term interest rates are higher than longer-term ones. Typically, longer-term GICs offered better rates than shorter ones. Interest rates have been climbing since 2022, but economists predict that rates will fall in summer 2024. Thus, the rates offered on longer term GICs like 5 and 10 year terms are lower than 1 or 2 year rates.
Our guide to GICs in Canada
Canadians' interest in GICs have been on the rise in recent years as they are considered to be safe investments. There are many things to consider when shopping around for GICs - and we have broken it all down for you.
What is a GIC?
A GIC, guaranteed investment certificate, is an investment product that has a guaranteed rate of return for a specified duration of time. It is deemed to be a safe and extremely low-risk type of investment.
With a GIC, you deposit your money at a bank or other financial institution for a specific period of time (known as the “term”), and they will guarantee you a return of the principal (the initial amount you invested) plus pay you in the form of interest. GIC terms can vary anywhere from as little as 30 days up to 10 years, and typically, the longer you're willing to invest your money, the higher the interest rate you'll receive.
Due to the nature of GICs, they're particularly useful for people with short investment horizons or those who are working towards specific time-sensitive goals (like soon-to-be-retirees or home-buyers with a specific timeline). If you’re a risk-averse investor, GICs are also a great option and will shelter you from the volatility and fluctuations of the stock market.
Short-term vs. long-term GICs
One of the first things you should think about when shopping for a GIC (aside from the rate itself) is whether you’re interested in a short or long-term investment. The answer to this question will largely depend on your financial goals.
Short-term GICs are a great option for those who have a short-term savings goal and want to prioritize liquidity. They take less than a year to mature, and the principal is guaranteed with an advertised rate of interest.
Long-term GICs, on the other hand, have terms of one year or longer and typically carry higher interest rates than their short-term counterparts. These are perfect for investors with long-range savings goals (such as a downpayment on a house) or a desire to use their GIC as passive monthly income.
How are GICs insured?
The Canadian Deposit Insurance Corporation (CDIC) is a federal Crown Corporation that insures eligible deposit accounts (including GICs as well as chequing and savings accounts) made with its member banks; it’s fully backed by the Government of Canada. Insurance offered by CDIC is automatically in place for eligible accounts at CDIC member banks at no additional charge to consumers. (You don’t need to purchase insurance – it’s your bank’s insurance policy).
CDIC insurance will cover up to $100,000 of your deposits and protect your money in the highly unlikely scenario that the financial institution you bank with closes its doors or goes bankrupt. Since CDIC was founded in 1967, Canadians haven’t lost a single dollar in deposits. Over 80 banks in Canada have CDIC insurance including all of Canada’s big five banks as well as several online-only institutions like EQ Bank and Oaken Financial.
How are GIC rates calculated?
Interest on GICs is typically paid out either monthly, biannually, annually, at their maturity or on a predetermined date set by the provider.
There are two types of interest associated with GICs - simple interest and compound interest.
Simple interest is paid on the initial principal only. For example, if you invested $50,000 into a two-year GIC with 1.5% interest, you’d receive a return of $750 each year. Following this logic, at the end of your two-year term, you’d have made $1,500 in interest.
Alternately, compound interest is paid on the principal as well as the interest earned at every interval (essentially, “interest on top of interest”). If we were to use the same GIC in the example above, your total interest earned after two years would be $1,511.25. That’s a gain of $11.25 on top of your simple interest. And, if you decided to let your interest compound monthly instead of yearly, you’d net an even higher extra amount at $21.76.
Types of GICs in Canada
1. Cashable GICs
For those looking to take advantage of higher GIC interest rates but don't feel comfortable locking their money away for too long, cashable GICs are the perfect solution. These GICs typically only involve a one-year term and have the option to cash out early after 30 to 90 days, providing an ideal solution for fluctuating interest rates. If the rate rises above that of your GIC, you can always cash out and put your money somewhere else. If it falls lower, you'll be locked into a guaranteed higher percentage for the length of your term. It's essentially a win-win. The only drawback? Cashable GICs tend to have lower interest rates than others due to their flexibility.
2. Registered GICs vs. non-registered GICs
Registered GICs exist inside registered investment accounts such as TFSAs and RRSPs, meaning you won't have to pay taxes on the interest accrued. That being said, you will have to obey the rules of these accounts when it comes to contribution limits.
Non-registered GICs are essentially the opposite of registered GICs: while the interest you earn is taxable, there's also no limits on what you can invest.
3. Redeemable GICs vs. non-redeemable GICs
Similar to cashable GICs, redeemable GICs also allow you to cash out early if desired. The main difference? Redeemable GICs will typically allow you to access you money early without being subjected to a waiting period. The only catch is that you may get saddled with lower-than-average early redemption rates.
The opposite of redeemable GICs, non-redeemable GICs won't allow you to access you money early without paying a penalty fee. That being said, you'll earn much higher interest.
4. Market-linked GICs
If you're looking for a GIC with some elevated risk (and the bigger gains that could come with it), a market-linked GIC may be right for you. These function as a sort of hybrid: while they're still technically GICs, they're also linked to a particular market and can only guarantee your principal investment. Unlike other GICs, these are subject to market volatility and are more of a rollercoaster.
5. Foreign currency GICs
Foreign currency GICs are just what they sound like: GICs in a foreign currency (typically USD). If you travel to the U.S. often, it may make sense for you to invest in a U.S. currency GIC (or other foreign currency GIC).
GIC Investment strategies
GIC laddering is a simple way to maximize the return from your GIC investments, without locking in all of your money into one long-term investment. With this strategy you divide your money into multiple GICs, with varying maturity dates. This means you're able to access your investment at regular intervals, when the GICs mature. This can also help take advantage of higher interest rates.
The best GIC providers in Canada 2024
EQ Bank GIC Rates
EQ Bank GIC rates are among the best GICs offered in Canada and are CDIC-insured. Interest earned on GIC investments is paid annually. A minimum investment of $100 is required to open an account with EQ Bank. The Toronto-based independent bank offers competitive GIC rates to all Canadians, excluding residents living in Quebec.
Oaken Financial GIC Rates
Oaken Financial GIC rates are some of the best GICs offered in Canada and are CDIC-insured, offering a competitive rate for one-year term GICs. Interest on GICs is paid annually and not compounded. Since Oaken Financial offers one of the best GIC rates on the market, a minimum investment of $1,000 is required. Oaken Financial is an independent bank eligible to all Canadian citizens.
Luminus Financial GIC Rates
Luminus Financial is a credit union offering GICs with a wide range of terms between 30 days and five years. Luminus Financial offers a very competitive rate for a non-registered GIC with a one year term. An account with Luminus Financial requires a minimum investment of $500 and is only available to Ontario residents.
Achieva Financial GIC Rates
Achieva Financial is a digital bank offering high GIC interest rates with varying terms of one to five years to anyone who is a resident of Canada. A minimum investment of $1,000 is required.
Alterna Bank GIC Rates
Alterna Bank is an online bank offering GICs with terms ranging between one to five years. Alterna Bank GIC rates require a low minimum deposit of $500 with interest paid annually. Alterna is open to all Canadian residents and is CDIC-insured.
Steinbach Credit Union GIC Rates
Steinbach Credit Union GIC interest rates is a credit union offering GICs with terms ranging between one and five years. An account with Steinbach Credit Union requires a minimum investment of $500.
CIBC currently offers a non-registered GIC that is CDIC-insured. CIBC is among Canada’s largest banks and offers a variety of GICs and other investment products.
Scotiabank offers GICs that are RRSP/RRIF eligible and available to all Canadians. Scotiabank also offers market linked and cashable GICs. Read more about Scotiabank GICs.
RBC GIC Rates
As one of Canada’s largest banks, RBC GIC rates offer a return-rate on non-redeemable GICs ranging from 30 days to 10 years. GICs purchased through interest on RBC GICs are paid annually and are not compounded. RBC is one of Canada’s largest banks and available to all Canadians.
BMO GICs require a minimum deposit of $1,000. BMO is currently the only major bank in Canada to offer a 10-year GIC term. Since BMO is one of Canada’s major banks, it is available to all Canadians, coast to coast.
As a digital bank, Tangerine has become a leader within Canada’s online banking industry. Instead of operating traditional brick-and-mortar branches, it has a few Tangerine Cafés and pop-up locations across the country. Tangerine offers premium guaranteed investment certificate (GIC) rates and no-fee accounts.
Similar to the other Canadian Big Five banks, TD Canada Trust offers a variety of GIC investment options. Among these options are both cashable (redeemable) and non-cashable (non-redeemable) GICs. TD has more than 13 million personal and small business banking customers across the country.
Whether you need a mortgage, credit card, savings account, or insurance coverage, we help you find and compare the best financial products for your specific needs.
When it comes to mortgages, Ratehub.ca is more than just a place to research and compare the best rates. Our goal is to give Canadians the best mortgage experience from online search to close. This means offering Canadians the mortgage tools, information and articles to educate themselves, allowing them to get personalized rate quotes from multiple lenders to compare rates instantly, and providing them with the best online application and offline customer service to close their mortgage all in one place.
Ratehub.ca has been named Canada's Mortgage Brokerage of the Year for four years straight (2018-2021). With over 12 years of mortgage experience, and over $11 billion in mortgages funded, we deliver you the best mortgage experience in Canada.
How does Ratehub.ca make money?
Financial institutions pay us for connecting them with customers. This could be through advertisements, or when someone applies or is approved for a product. However, not all products we list are tied to compensation for us. Our industry-leading education centres and calculators are available 24/7, free of charge, and with no obligation to purchase. To learn more, visit our About us page.read more about us