Natasha Macmillan, Business Unit Director - Everyday Banking
Best 5 year non-registered GIC Rates in Canada
Frequently asked questions
How do 5-year non registered GICs work?
A 5-year non-registered GIC is a GIC that is held in a non-registered account, so accounts other than TFSAs, RRSPs, RRIFs, RESPS, FHSAs etc. The interest earned on these GICs are taxable, but you are not limited to an annual maximum you can deposit into the GIC in a non-registered account. 5-year GICs might be ideal for financial goals like a downpayment, renovations or vacations, but it could be argued that your money will be sheltered from taxes in a registered account.
What is the best 5 year GIC in Canada?
The best 5-year GIC rates in Canada are currently paying 4.75% on 5-year non-registered GICs as of February 2024. Many providers are offering 4.50% GICs or higher right now. Many credit unions and digital banks offer particularly high rates, because of their lower operating costs, but some big banks have special rates for GICs, too. Online banks like EQ Bank or Simplii Financial offer 5-year GICs that pay high rates with low minimum deposits of just $100 vs. the average $1,000 deposit requirement, making them more accessible for Canadians with less money to invest.
How should you use a 5-year GIC?
Let’s look at an example to understand the possible uses of 5-year non-registered GIC.
If you are saving up for a $25,000 down payment in 5 years, you can deposit a maximum of $8,000 annually in a registered First Home Savings Account (FHSA), and put some in your TFSA up to a maximum of $7,000. But if you want to deposit more than $8,000 in one year and choose to use your TFSA for other investment goals, you’ll have a limited amount of contribution room in these accounts. So a good option would be to use a 5-year GIC or for the remainder of your down payment savings over and above the annual FHSA limit. Some people may choose to put all of their money in a 5-year GIC for specific financial goals because the money is locked in and separated from other savings, so you know it will be used for the right purpose when you need it.
More GIC types
The type of GIC you choose depends on your situation and financial goals. There are a variety of term lengths and account types to choose from. Read more about popular GIC types in Canada:
- Best GIC rates in Canada overall
- The best 90-day non-registered GIC rates
- The best 1-year non-registered GIC rates
- The best 1-year registered GIC rates
- The best 5-year registered GIC rates
To help you decide which GIC is right for you, read our guide to the different types of GICs in Canada.
The bottom line
Remember to consider the interest rate, term length, flexibility, and CDIC coverage when choosing the right GIC for you. With the right investment strategy, you can secure your financial future and enjoy guaranteed returns. By choosing one of the best 5 year non-registered GIC rates mentioned in this article, you can get the most out of your investment and achieve your financial goals.
The best overall GICs in Canada
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