Investments · GICs
A GIC is a known return in exchange for your money being locked in.
The capital is guaranteed and the return is set in advance. What you give up is access to your money during the term, unless the GIC is redeemable.
What this page covers
The points to look at
- 01Redeemable or non-redeemable: the rate gap is the price of being able to exit.
- 02Laddering terms so everything does not mature on the same date.
- 03Deposit insurance protection, and what it covers per institution.
A GIC is a rate, a term and exit conditions
| Item | What it changes | What to check |
|---|---|---|
| Term | The longer the term, the longer the money is locked. | The date I will need the money. |
| Cashable or not | A non-cashable GIC cannot be withdrawn before maturity. | Early redemption conditions, if any. |
| Compound or simple interest | The method changes the real yield for the same advertised rate. | The effective annual yield. |
| Deposit insurance | Protection is capped per institution and per deposit category. | Whether the issuer is covered, and up to what cap. |
Ask before you buy a GIC
- 1.What happens to the GIC if the issuer changes terms at maturity?
- 2.Is the rate the same in a registered and non-registered account?
- 3.Can I stagger several maturities to free up money regularly?
- 4.What fees apply if I go through a broker rather than the institution?
Guides
Read next
// Investments
FHSA, HBP or TFSA: Which to Use for a First Home?
Three accounts, three logics: a deduction, a temporary RRSP withdrawal or flexible savings. How to compare them before buying.
// Investments
Cashable or Non-Redeemable GIC: Choose Your Liquidity
Measure the extra rate offered in exchange for locking funds before giving up early redemption.
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Build a GIC Ladder to Spread Maturities
Split the amount across several maturities so one tranche renews at a time and rate risk is smoothed.
Frequently asked
What people ask most
It depends on your situation. The FHSA is for saving with a deduction and a tax-free qualifying withdrawal. The HBP temporarily borrows from an existing RRSP and requires repayment. In some cases both can be combined. Have your plan checked.
Put numbers on your decision
Open the calculatorsFor information only: not an approval, and not a rate offer.
A question about your situation?
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