The best 1-year non-registered GIC rates

A guaranteed investment certificate (GIC) is a financial tool that lets Canadians invest their money, and guarantees the return of your principal + a set amount of interest. A non-registered GIC, specifically, is basically any GIC that is not invested in one of the registered savings deposits that exist in Canada (i.e. RSP, RESP, RDSP, RIF). With a non-registered GIC, you invest your money for a set period of time (the “term”) and are guaranteed to earn a set amount of interest, so long as you don’t redeem your money before the GIC’s maturity date. Typically, the longer you invest for, the higher the interest rate you’ll receive.

As we mentioned, a non-registered GIC is any GIC that is not invested in a registered savings deposit. These include: redeemable GICs, non-redeemable GICs and even some market-linked GICs. With redeemable GICs, you earn less interest in return for the flexibility to cash out early. Non-redeemable GICs, on the other hand, pay higher interest rates as an incentive to invest for longer. And if you’re comfortable taking on a bit more risk, market-linked GICs are tied to the performance of the stock market. With them, you’re not guaranteed to see a return, but there is potential to earn a much higher one than with a regular non-registered GIC product.

Considered a long-term GIC, a 1-year term means the GIC agreement is valid for 12 months from when you first opened the account - during which your interest rate will be locked in and your money will be held by the bank or credit union. After the 1-year period ends, the GIC will mature and the agreement will end, allowing you to withdraw the original amount of money you deposited plus any interest you accrued.

A 1-year term is the most widely-popular among those looking to open a GIC and is an ideal sweet spot; it’s a short enough period of time to fit with a range of savings goals while being separated from your cash but is also long-enough for financial providers to offer enticing interest rates. 

Most 1-year GICs are non-redeemable, which means your money is inaccessible for the entirety of the 1-year term and withdrawing your cash before the agreement ends will result in a penalty - unless certain conditions are met. 

A 1-year GIC is a great option if you’re saving for a specific time-sensitive goal (e.g. an upcoming home purchase or wedding within the next year), trying to secure a higher interest rate than what's offered by a savings account, or if you’re nearing retirement. With no risk of losing your initial deposit or a decrease in your interest rate, you can grow your money safely and securely with no volatility. A 1-year GIC can also be a good option for risk-averse investors who want to steer clear of the stock market while still combating inflation.

However, a 1-year GIC may not be the best place to store your emergency fund or cash you suspect you’ll need on short notice. A 1-year GIC should also be reserved for savings goals with short time-horizons (if you plan to invest your money for several years in the future, a robo-advisor or online brokerage may be a better alternative).

Short-term GICs with terms of between 30 to 270 days are also an option if you can’t be parted from your cash for up to 1 year, or you can consider a high-interest savings account that has no restrictions on withdrawals but doesn’t guarantee a fixed interest rate.