How do you find the best Guaranteed Investment Certificate (GIC) rates? What even is a GIC anyway?
Maybe a financial planner or someone at your bank told you to take a look at GICs as a way to save more money. But not everyone knows what a GIC is, how it accrues interest or how to shop for the best GIC interest rates. After sorting that out, you can look at the different types of GICs that are available for short-term and long-term investing. That way you can make a sound investment and have more confidence when you set up your new GIC account.
A guaranteed investment certificate (GIC) is a safe way for Canadians to invest money. While stock market investments have their fair share of risks, GIC’s don’t. They promise a return on your investment based on the interest rate you lock-in. A GIC is similar to a savings account. You save a specific amount of money over a set term with an interest rate that’s locked in for that particular term. When the term ends, you will get all your original money back plus the interest that is accrued. Let's say the bank offers a 2.05 percent tax-free savings account and 3 percent, 1 year GIC. If you have a few thousand dollars, the higher interest rate from the GIC will give you more money once it matures.
Most GIC’s are eligible for coverage under CDIC. CDIC stands for Canada Deposit Insurance Corporation. It guarantees deposits for customers that are up to $100,000. Credit unions, on the other hand, offer provincial insurance so they protect 100 percent of the money deposited regardless of the amount.
There are different types of GICs. These include:
Here’s more helpful information on GICs:
GICs let you invest your money or store it in the bank. Depending on the interest rate, you can make extra money from the accruing interest when your GIC matures, meaning when the term ends.
The interest rates can change at the bank and not all banks will offer the same rates. Here's an example of the type of return you might make. Let's say you live in Toronto and you invest $5,000 in a one-year GIC through Oaken Financial at 2.55% interest. Your total at maturity will be $5,127.50 because you will make a $127.50 return. The $127.50 is the interest that accrues on the $5,000 you locked in the account.
If you’re interested in setting up a new GIC account, a good place to start is comparing options online. Credit unions and digital banks usually offer more competitive rates. And, keep in mind, the higher the interest rate, the more money you will make when your GIC reaches maturity.
You compare more than 100 GIC rates from the leading banks and credit unions in Canada on RATESDOTCA:
We highlight the best GICs on offer each year based on rate and market relevance. These GICs will offer consumers the most savings and features. This year’s list includes:
In the 2019 Best of Finance awards, Oaken Financial was selected because it is an exceptional bank that has no hidden fees. They provide customers with the most competitive interest rates. The minimum deposit amount is $1,000 for their non-redeemable GICs. Interest rates range from 2.70% for one year to 3.05% for five years and they allow for flexible transfers from savings accounts to GICs if you’re a customer.
These rates were the rates offered at the time those awards were given and may change at any time.
Oaken Financial offers customers the convenience of online, mobile and physical locations. Any GIC or savings account that you open is backed by the Home Bank and Home Trust Company which is a member of the CDIC.
Motive Financial is an online bank that makes it easy to bank remotely. Because the bank is online, customers can benefit from competitive interest rates. A minimum GIC investment will start at $1,000 while interest rates range from 2.34% for a 12-month term up to 2.50% for a 60-month term. Motive Financial is a CDIC member through Canadian Western Bank.
EQ Bank is an online bank that offers competitive GIC interest rates. With a minimum investment of only $100, interest rates range from 2.90% for a five-year GIC to 3% for a three-month GIC.
A wholly owned subsidiary of Laurentian Bank of Canada, B2B Trust is a federally chartered trust company that serves a network of some 15,000 financial professionals across key business verticals including financial advisors and their dealerships; deposit and mortgage brokers and their firms; mutual fund and insurance manufacturers; MFDA and IIROC members.
One of Canada’s “Big 5” banks, TD Canada Trust has more than 85,000 employees globally. The Toronto-Dominion Bank (TD) offers a full range of banking and financial products through a variety of subsidiaries, collectively referred to as TD Group. TD Canada Trust is the personal banking arm of TD in Canada.
CIBC is a leading North American financial institution celebrating 140 years of serving clients in Canada and around the world. Through two distinct business lines, CIBC Retail Markets and CIBC World Markets, CIBC provides a full range of products and services to almost 11 million individual and small business clients and meets the financial needs of corporate and institutional clients.
Libro Financial Group is a credit union based in South western Ontario that focuses on residents in the surrounding area. Libro was the Winner of many national credit union marketing awards - including Best in Class in 2007.
The National Bank is an integrated group which provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in Canada. Founded in Quebec City in 1859, the Bank has grown while striving to always earn the trust of its various stakeholders and contribute to the development of the communities it serves.
PACE Savings and Credit Union is an Ontario based credit union focusing on the Greater Toronto Area. Membership is open to all residents and businesses in the province of Ontario, Canada.
Rapport serves over 21,000 members at 12 branch locations, with close to 90 employees and approximately $430 million in assets under administration. A member-owned institution, Rapport provides a full range of banking services, from savings and chequing accounts to loans and mortgages to financial planning and investment management.
Scotiabank is one of North America's premier financial institutions and Canada's most international bank. With a team of more than 88,000 employees, Scotiabank Group and its affiliates are dedicated to helping their 23 million customers become better off through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets.
SBI Canada Bank (“SBIC”), was established in 1982 as a wholly owned subsidiary of State Bank of India , the largest Bank in India with more than 200 years of reputation for customer’s trust and service. State Bank of India (Canada) services Canada in Ontario and British Columbia through its six branches: Toronto, Mississauga, Scarborough, and Brampton, Vancouver and Surrey.
Tangerine Bank (more commonly known as Tangerine, and previously as ING), is a Canadian direct banking subsidiary of Scotiabank. Tangerine offers savings accounts, Tax-Free Savings Accounts (TFSAs), no fee chequing accounts, and other personal finance products. Along with PC Financial, Tangerine is often touted as having the best customer service in the Canadian banking industry. Tangerine Bank is a CDIC member.
Great-West Life, together with its subsidiaries, London Life and Canada Life, is a leading Canadian insurer, with interests in life insurance and health insurance, investment, retirement savings and reinsurance business, primarily in Canada and Europe. Great-West Life is a wholly-owned subsidiary of Great-West Lifeco, a member of the Power Financial Corporation group of companies.