Are thinking about purchasing a Guaranteed Investment Certificate (GIC)? Canada has an impressive range of options when it comes to investments, with many financial institutions offering high-interest GIC rates. Across the country, you’ll find a variety of products that provide short or long-term gains for Canadian citizens. Here, we’ll take a look at these service providers and help you to quickly discover the best GIC rates…
Below are the Best GIC rates Currently Offered in Canada
 | Specification: Tangerine 5 Year GIC
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 | Specification: motusbank 5-year RRSP GIC
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 | Specification: Scotiabank 5 Year GIC
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 | Specification: RBC Royal Bank 5 Year RateAdvantage GIC
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 | Specification: HSBC 2 Year GIC – Non-Redeemable
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What is a Guaranteed Investment Certificate?
A Guaranteed Investment Certificate is a fixed income investment typically issued at Canadian banks and trust companies. The GIC provides one of the safest ways for Canadians to invest their money, as it guarantees the protection of the principal or original investment, as well as the rate of return or interest rate. Banks usually require a minimum deposit of $500. Investors who apply for GICs agree to lend the bank the money for a fixed period of time, which can range from 30 days to 10 years. The interest you’ll receive at maturity will be based on that agreed term – so, the longer the term, the higher the rate of return. Therefore, your investments can potentially double when you secure the best GIC rates.
Types of Guaranteed Investment Certificates
There are different types of GICs that cater to the specific needs of investors. Whether you intend to save for the short-term, or you want to invest for your family’s long-term future, there’s a GIC tailored to your needs. Here are three Registered GICs you should take a look at:
- Registered Retirement Education Plans GICs are government-approved savings accounts for Canadians’ future retirement. Investors can make payments into these accounts until they are 71 years old.
- Registered Education Savings Plan GICs are government-approved savings accounts that parents can purchase for their children’s education, particularly post-secondary education.
- Tax-Free Savings Account GICs are designed to help Canadians who want to increase and withdraw their investments tax-free.
Guaranteed Investment Certificate or GIC is a type of Canadian investment offering guaranteed return rate for a fixed period. This type of investment is common among banks or trust companies. Due to its low-risk profile, the GIC’s guaranteed return is lesser than other investments like mutual funds, stocks and bonds.
Best GIC Rates in Canada
Best Redeemable Gic’s in Canada
| | Specification: Tangerine 3 Year GIC
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 | Specification: CIBC Redeemable 5 Year GIC
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| | Specification: RBC Royal Bank Redeemable 5 Year GIC
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 | Specification: TD Bank 5 Year GIC
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Compare Redeemable GIC rates in Canada
Offerhub.ca lists a wide variety of Redeemable GICs to give you the flexibility to choose from. Offerhub.ca knows that you want to see all the options before you invest your hard-earned money. Hence, the list below provides you with a range of Redeemable GICs currently available in the market with a range of maturity dates, rates and issuer companies.
Best USD GIC Rates
In Canada, some financial institutions offer the ability to invest in the currency of the U.S that is the dollar. It is important to find out and compare the different rates offered by banks for the best choice.
| | Specification: Tangerine USD 4 Year GIC
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 | Specification: BMO Bank of Montreal USD Term Deposit 5 Year GIC
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 | Specification: Alterna Bank USD 5 Year GIC
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What are foreign currency GICs?
A foreign currency GIC allows you to access the currency of the country in question with still bearing an interest. In Canada, one can invest in the Yen of Japan, the pound of Britain, the Euro and the dollar of the U.S. However, the latter dominates the GICs.
Why invest in foreign currency GICs?
A GIC of an external currency allows you to access the currency of the country that it is associated with, if in future its need arises, and interest is earned when it is invested. However, foreign currencies GICs are nowhere found in the travellers’ list. Both U.S. and Canadian dollars are followed by the majority of investors and should you suspect a significant decline in the Canadian Dollar in the future, as a result of the decline, you would get a profit if you would invest in U.S. dollar GIC. Therefore, diversification of your cash and preservation of your power to purchase would be possible via the addition of an external currency GIC to your investment selection.
Are there any drawbacks to investing in foreign currency GICs?
Here are some of the things you should22 consider when choosing to invest in foreign currencies;
- CDIC insurance does not cover the external currency GICs hence, no guarantee of getting the money back.
- The rates on currency GICs of foreign nature can be minimal, in comparison to GICs from Canada.
- The banks sell the investments and a high rate and buy at a low rate hence diminishing your returns
- For the U.S. GICs and term deposits are not offered within registered accounts.
Best Short Term GIC Rates in Canada
Guaranteed Investment Certificates (GICs) are investments which not only guarantee your initial investment but also provide a fixed rate of return over a specified period. Short-term GICs are usually for less than a year. The short-term maturity date helps you plan your expenses efficiently while earning interest on funds that you don’t need immediately.
Best 30-Days GIC Rates in Canada
Best 90-Days GIC Rates in Canada
| | Specification: Tangerine 90 Day GIC
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| | Specification: Tangerine USD 90 Day GIC
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| | Specification: TD Bank 90 Day GIC
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Best 180-Days GIC Rates in Canada
| | Specification: Tangerine USD 180 Day GIC
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| | Specification: Scotiabank 180 Day GIC
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| | Specification: Tangerine 180 Day GIC
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Best 270-Days GIC Rates in Canada
| | Specification: Tangerine 270 Day GIC
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| | Specification: Tangerine USD 270 Day GIC
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| | Specification: RBC Royal Bank USD 270 Day Term Deposit
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Should you invest in Short-term GICs?
If you’re looking for a way to invest your money towards a short-term goal, short-term GICs could be an excellent option. Short-term GICs are a great option if you want to accumulate funds fast for a big-ticket purchase like a home, new car, or a down payment on a mortgage.
GICs are appropriate for anyone who wants to guarantee their principal amount since they provide a guaranteed payout just as the name suggests. You have probably never understood why many investors choose to have short-term GICs in their portfolio. When you invest in a short-term GIC, you would be aware of the amount you’re going to receive as soon as the term is over. You won’t be worried about market price fluctuations because the invested amount remains safe and sound. You won’t have to worry about losing your principal.
Benefits of Short-term GICs
If you want to have an investment that offers a liquid, yet stable rate of return, a short-term GIC would be the right choice. Remember your money won’t be locked for an extended period of time as it happens with long-term GICs.
Short-term GICs gives you the flexibility you need in the current interest rate environment. Despite the fact that they offer lower interest rates, Short-term GICs remains a good option for anyone who wants to park a portion of their money. They provide a safe way of investing funds while saving for large purchases and future investments.
Best 1-Year GIC Rates in Canada
The one-year GICs offer the best possible combination of competitive interest rates and flexibility of investment. They do not have any long-term commitment and are ideal for funds that you may have in your hand now but do not need for the next year. The interest rates on one-year GIC are higher than the 180 days GIC because of the longer period of investment.
| | Specification: Tangerine USD 1 Year GIC
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| | Specification: Scotiabank 1 Year GIC
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| | Specification: Tangerine 1 Year GIC
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One-Year GIC Rates Canada
One year GICs rates listed above are the best possible options available in the market right now which not only will provide you with good returns but will also ensure that your principal is secured.
Best 2-Year GIC Rates in Canada
We have compiled a list of popular two-year GIC’s available in the market We want you to make the most out of available options in the market. The list is revised regularly to come up with the best solution for you.
| | Specification: Scotiabank 2 Year GIC
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| | Specification: Tangerine 2 Year GIC
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| | Specification: Tangerine USD 2 Year GIC
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Advantages of 2-Year GIC Rates in Canada
Are you saving for an expense that you need to incur after two years? GICs with a two-year maturity is the right choice in this case. Not only will GICs invest the funds and earn you interest, but it will also ensure that your principal amount remains intact and is not lost in the process of making money from money. Two-year maturity GICs make sure that your fund is available to you when you need them for your expenses.
Best 3-Year GIC Rates in Canada
We make shopping for the best 3-year GIC rates in Canada easy. It is often said that the longer a fund is invested the better is the return on the fund. The beauty of GIC is that irrespective of the time limit of investment all funds are guaranteed. Three-year GICs provide options for you to invest your funds for the next 3 years and provide you superior interest in return.
It is true most Canadian GICs are classified by Canadian dollars, but, you will also find some institutions that provide GICs in other foreign currencies, with the most popular being U.S. currency. Here are a couple of reasons why you should consider purchasing GIC products.
Should I Purchase in Foreign GIC Currencies?
By investing in foreign currency GICs, you can acquire the currency of the country associated with it. This provides you with the opportunity to make future investments more profitable. For instance, if you decide to take a trip outside Canada in 6 to 12 months and suspect the value of the currency in Canada might drop before you decide to leave the currency, buying foreign currency GIC is a great way to take advantage of the current situation before packing your bags. However, this may not be a wise option for travellers as many investors rely on both U.S. and Canadian dollars, so you ought to stick to both these currencies. Purchasing U.S. GIC is a profitable move. By investing in the GIC of foreign countries, you can retain your buying power and diversify your investment portfolio.
What currencies can I choose from?
U.S. GICs are the most popular in Canada. This is because the U.S. is Canada’s largest trading partner. However, some financial institutions offer GICs in several profitable currencies including the Japanese Yen, Pound and Euro.
Disadvantages of GICS in foreign currency
The following are a few disadvantages of GICS in foreign currency:
- GICs in foreign currency interest rates are nominal when equated to Canadian GICs
- Similar to any other foreign currency dealings with the bank, they will buy it somewhat lower than the average market rate. However, they will sell the foreign currency at a higher rate. This is why the bank generates profits.
- Foreign currency GICs are not backed by CDIC insurance, which means that if your financial institution fails, you may not have the option to get your money back.
- Term deposits and U.S. GICs are not provided by registered accounts
GICs in RRSPs
GICs can be held and purchased in both registered and non-registered accounts. Registered accounts constitute special tax-sheltered saving plans that are government approved. On the other hand, non-registered accounts are similar to regular bank accounts. Take a look at how RRSPs work and how you can use them for your benefit.
[gic_list limit=”4″ gictype=”rsp-gic” hidep=1 ]
What are RRSPs?
RRSPs are accounts that have been designed to help Canadians save money after retirement. These plans enable you to contribute a specified amount of money every year till you hit 71 and deduct this contribution from your taxable income. The maximum contribution can range up to 18% of your income. Additionally, RRSPs can be accessed through most financial institutions. You are also allowed to hold a wide diversity of investments including bonds, GICs, stocks, investments, etc.
Benefits of holds GICs in RRSPs
Here are some key benefits of holding GICs in RRSPs:
- It decreases the amount of income tax you pay. You can deduct a maximum of 18% from your taxable income, allowing you to save a significant amount of money.
- Unlike other forms of investments that are insecure and dependent on the stock market, RRSP GIC gives you a fixed amount of interest over a specific time period. This ensures you can determine your return even prior to making an investment.
- With GIC, your principal will always be guaranteed; this makes it a comparatively safer form of investment.
- As long as it’s in the RRSP account, your money can grow tax-free. You only pay tax on the money that has been withdrawn from the RRSP account.
GIC in RESPs
Most first-time investors are not aware of the fact that they can purchase GICs in both registered and non-registered accounts. Some tax-sheltered government accounts include TFSAs, RDSPs, RRSPs, and (RESPs), registered education savings plans. Take a look at how you can use RESPs to save money for your child’s education.
What are RESPs?
RESPs are saving accounts that have been approved by the government for post-secondary education. Most parents typically open this account in anticipation of their child’s future. There is no annual limit to RESPs opened since 2007; however, there is a lifetime contribution limit of $50,000. While the federal government along with some provincial governments offer grants to enhance RESP contributions, these do not include the limit, making it a safer option if you want to send your kid off to college. RESPs can remain open for maximum 35 years.
Benefits of holding GICs in RESPs
Some major benefits include:
- You can rest assured the principal will be returned to you because it’s in a GIC, making it a safer investment option.
- Similar to holding GICs in TFSAs and RRSPs, with RESPs, your income is not taxed. The tax is payable by the receiver of the RESP if he or she received money for educational expenses. Since most students have little or no income, the tax may only be nominal.
GICs in TFSAs
TFSA is a tax-free saving account that is registered by the government. Take a look at how TFSA-eligible GICs works and how you can use it to your benefit:
What are TFSAs?
TFSAs were introduced by the Federal government in 2009 to help Canadians withdraw and grow their savings tax-free. At first, citizens could only contribute to $5,000 per year however; the annual contribution has now been increased to $5,500 per year in 2013.
Benefits of holding GICs in TFSAs
Like GICs in RRSPs, contributions are non-tax-deductible. Here are a few major benefits of holding GICs in TFSAs:
- Since both your capital gains and interest are tax-free your savings are allowed to grow tax-free.
- Unlike RRSP, in TFSAs, your withdrawals are also tax-free. This allows you to save more.
- Like other GIC options, your principal is guaranteed. This makes TFSAs a good option as your principal will also be returned to you.
