The best 1-year registered GIC rates

A registered GIC is a safe and conservative way to grow your money, offering modest returns with absolutely no risk while providing the tax-shelter benefits of a registered account.

At its core, a GIC RRSP works like any other GIC, and involves parking your cash with a bank or credit union for a set term period (e.g. 1 year). Your cash will be locked away for the 1-year term, and in exchange, you’ll secure a guaranteed interest rate and earn stable returns with no chance of losing your initial deposit. Once the GIC matures after the term ends, your funds will be made accessible.

Any contributions made to a GIC RRSP are tax-deductible, meaning the amount you fund is deducted from your gross income and therefore will result in a bigger tax refund. Your money will also be tax-deferred (taxes will be owed only at the time you make a cash withdrawal, which will ideally be in the future when you’re retired and in a lower tax bracket). Like with any RRSP, the funds in your GIC can also be withdrawn early with no tax penalty to help fund your first-time home purchase (Home Buyers' Plan) or an advanced degree (Lifelong Learning Plan).

When a GIC held in an RRSP reaches the end of its term (aka its maturity date), in most cases, the bank or credit union will automatically move your funds from the GIC RRSP over to one of their RRSP savings accounts. This way, your cash will remain inside your RRSP at all times, ensuring your RRSP contribution room isn’t affected and you can continue to benefit from the tax-shelter advantages of a registered account. From there, you can choose to leave your funds in the RRSP savings account or invest the money in another RRSP account with the same bank. You can even transfer the funds in your RRSP from one bank to another and invest it elsewhere. Note: transferring the funds in your RRSP to another bank or credit union will have no impact on your contribution room because the money is continuously held in the RRSP the whole time and never cashed out.

In some cases, the bank or credit union may ask if you're interested in renewing the GIC once the term ends or will simply leave the funds in your RRSP as cash.

Rest assured, in all scenarios, the end of a registered GICs term won’t impact your RRSP contribution room or result in withholding tax since the cash will never be liquidated or withdrawn from your RRSP. 

A GIC RRSP can be a great investment decision for a number of people.

For instance, if you’re a soon-to-be retiree with a short-time horizon (will need access to your cash relatively soon in under five years), an RRSP GIC can help you safely grow your nest egg with no risk.

Additionally, if you’re an aspiring home buyer with a plan to purchase your first-ever property in the near future, a GIC RRSP can be a great place to store your down payment and earn interest with no risk of losing the money you’ve worked so hard to save up. Under the Home Buyers' Plan, you’re allowed to borrow up to $35,000 from your RRSP to fund your first home purchase with no tax penalty. Note, while investing in the stock market can reap higher returns in the long-term, short-term market volatility can mean losing money when you need it most. 

A GIC RRSP can also be an ideal savings vehicle for risk-averse investors or anyone looking to diversify their portfolio by allocating a set amount of money into low-risk assets.

No, not any GIC can be held in an RRSP.

The GIC must be offered as an eligible RRSP account by the bank or credit union. Some financial providers will offer the same interest rate for both registered and non-registered GICs, while others offer different interest rates across their GIC products.