The best 5-year registered GIC rates

The best overall GICs in Canada

What is a registered guaranteed investment certificate?

First, remember that a guaranteed investment certificate (GIC) is a financial tool that lets Canadians save money, and guarantee both the return of the principal and a set amount of interest. Registered savings accounts are savings plans created by the federal government that help Canadians save for specific goals (retirement and future living costs being the two biggest goals). All of these plans come with their own specified contribution limit per year, which you cannot go over, and have a number of other unique features that you can’t get with a typical savings account. You’re able to hold a number of investments within these registered savings plans, including mutual funds, stocks, bonds and GICs. So a registered GIC is simply a GIC in which your contributions count towards your annual contribution limit for that particular registered savings deposit. The interest you earn on a GIC in a registered account is not taxable, which is a major benefit. 

What types of registered GICs exist?

There are five main types of registered GICs that you can purchase.

• RRSP GICs: The most popular registered savings deposit is probably the RRSP GIC, which you would use to save for retirement. Keep in mind that you can't withdraw from an RRSP before retirement without facing a tax penalty. 
• RIF GICs:  When you reach age 71, you have to move your funds out of RRSPs, and could choose to put funds in an RIF GIC. An RIF is an investment account that is used once you've reached retirement age. 
• RESP GICs: You can also save for your child’s education with an RESP GIC, subject to the RESP contribution limits. 
• RDSP GICS: You could invest in an RDSP GIC if you want to save for the long-term financial security of someone who is eligible for the disability tax credit.
• TFSA GICs:  You can also invest in a TFSA GIC if you want to benefit from tax-free earnings and be able to withdraw your investment without penalty or losing contribution room (so long as you don't cash out your GIC before its maturity.)

Remember that each of these savings plans comes with unique features and set contribution limits, so you want to be careful not to go over your limit, before opening a registered GIC.

What is the highest 5 year registered GIC rate in Canada?

Currently, online banks and credit unions such as Oaken Financial offer some of the highest 5-year registered GIC rates in Canada. That's partly because digital banks have fewer overhead costs and can pay higher rates in order to attract new customers. Some major banks offer high rates on 5-year GICs like with TD Bank GICs and BMO GICs.