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 institutions 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. 

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.

With the upward movement in the Bank of Canada’s overnight target rate in 2022, GIC rates have seen an increase. Earlier this year the best 5-year non-registered GIC rates were closer to 3%, whereas today they are well above 4%. Should the Bank of Canada continue to increase the overnight target rate, it is believed that the change GIC rates will continue. 

A guaranteed investment certificate (GIC) is 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 ten years, and typically, the longer you’re willing to invest your money, the higher the interest rate you’ll receive.

With a GIC, your interest and cash are locked in the term period. As a result, you can rest assured your interest rate won't spontaneously drop (due to changes in the economic climate or a bank's prime lending rate like in the case of savings accounts) but you also can't withdraw your money before the term ends (depending on the type of GIC, early withdrawals can result in a penalty). 

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.

GICs are available in a variety of forms. If your goal is to save for the short-term, you can get a basic cashable GIC that allows you to withdraw your cash anytime after a 30-90 day waiting period. If you want to save in a registered tax-advantage account, you can also look at RRSP GICs and TFSA GICs. 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). Finally, if you’re comfortable taking on a bit more risk, you could also look at market-linked GICs, which are a type of hybrid account that entails more risk (and potentially higher gains) by offering some exposure to the stock market.

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 loses 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.

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. 

You can compare the interest rates from multiple financial institutions and open a GICs by navigating the GIC comparison chart above. Once you’ve found the best GIC rate with the specific account type and term you're looking for, you can open an account by clicking the Get this Rate button. Most major banks are accessible to all Canadians, meanwhile, several credit unions may only be available to residents of certain provinces.  Opening a GIC can also be done in-person at a bank or credit union branch, over the phone, online, or through a GIC Broker.

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 are liquid and let you access your money at any point in time with no restrictions on withdrawals, which makes them great for storing away an emergency fund or general short-term savings. The one caveat: savings accounts rates aren't locked in like in a GIC, and can increase or decrease at any time (usually banks do provide some prior notice before an interest rate change). You can compare some of Canada's best high-interest savings accounts using our comparison tool.

Robo-advisors

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. A robo-advisor provides a completely hands-off investment experience, offering a range of pre-built portfolio options to choose from based on your risk tolerance, financial goals, and personal situation. 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.

Online brokerage

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.