Want to earn a high-interest rate without any risk?
Guaranteed investment certificates (GICs) could be a good option for you.
It’s one of the easiest and most secure ways to earn interest income.
Here are some of the best GIC rates in Canada (updated March 1, 2023):
| Bank Name | 1-Year GIC | 2-Year GIC | 3-Year GIC | 4-Year GIC | 5-Year GIC |
| EQ Bank | 5.00% | 4.55% | 4.30% | 4.20% | 4.20% |
| Simplii Financial | 4.50% | 4.05% | 4.10% | 4.15% | 4.20% |
| Tangerine Bank | 4.65% | 4.30% | 4.20% | 4.15% | 4.05% |
| Motive Financial | 5.05% | 4.70% | 4.50% | 4.40% | 4.35% |
| Peoples Trust | 5.10% | 5.40% | 4.85% | 4.65% | 4.50% |
| Oaken Financial | 5.05% | 4.70% | 4.30% | 4.25% | 4.15% |
| Hubert Financial | 5.00% | 5.25% | 4.85% | 4.90% | 5.00% |
| Meridian Credit Union | 4.90% | 4.75% | 4.70% | 4.70% | 4.70% |
| ICICI Bank | 4.70% | 4.70% | 4.40% | 4.40% | 4.40% |
| Canadian Tire Bank | 4.15% | 4.35% | 4.13% | 4.15% | 4.29% |
What Is a GIC?
GIC is a safe and secure investment that involves basically no risk. GICs generally offer better interest rates than savings accounts; however, with a tradeoff, i.e., you usually have to lock in your money for a specified period.
During this maturity period, you can’t cash in your deposits as you can with a savings account. However, banks and credit unions have introduced some flexibility for investors by branching out GIC into several types.
Types of GICs
You can classify GICs mainly into four categories:
- Traditional GIC: A fixed-rate non-redeemable investment. Here, you get a fixed interest rate on your investment that is locked in for a specified period.
- Redeemable (Cashable) GIC: Works pretty similarly to a savings account. Here, you can withdraw your savings before maturity. The interest rates offered at redeemable GICs are lower than non-redeemable ones.
- Variable-Rate GIC: The interest rate will change as overall borrowing rates go up or down. They’re great during rising interest rate environments but not so good when they’re going down.
- A Market-Linked GIC: Its interest rate changes with the underlying stock or equity. This type of GIC is ideal when the market is on a bullish streak but not great during a recession.
Do You Even Need a GIC?
I personally never bought GICs in the past, as interest rates were way too low. But the interest rates offered have been excellent lately, so I’ve bought some GICs recently.
But beware, anytime you tie your money up for a certain amount of time, your financial freedom is restricted. A good alternative to a GIC is to use a high-interest savings account (HISA).
For example, EQ Bank has HISA rates and you get much more freedom with your money. The everyday savings rate is 2.50%, so it might not be worth it to get a locked-in GIC if you need the flexibility.
However, if you don’t need the flexibility, then a GIC is an excellent option. For example, the 1-year GIC rate for EQ Bank is 4.75%.
You can sign up for an EQ Bank savings account here, and get a EQ Bank GIC here.
Overview of GIC Banks
Simplii GIC Rates
Simplii Financial is the online banking division of CIBC. It was founded in 2017 and now offers a host of financial services.
Besides investments, you can also use Simplii Financial for a mortgage and other borrowing services. You can have a GIC locked in with Simplii for as low as $100 of principal.
EQ Bank GIC Rates
EQ Bank is one of the most popular online banks in Canada. The EQ Bank GIC rates are quite remarkable.
Tangerine GIC Rates
Tangerine is a direct bank that has been around since 1997. In 2012, Scotiabank made a successful acquisition of Tangerine. Today, Tangerine is one of the biggest online banks in Canada. The bank offers competitive GIC rates without any hidden service fees.
Motive Financial GIC Rates
Motive Financial is a virtual division of the Canadian Western Bank. The bank offers savings, registered accounts, and GICs at rates that are different than that of CWB.
Motusbank GIC Rates
Motusbank is a relatively new name in the online banking sector. However, it stands on the credibility of Meridian, which serves more than 300,000 members.
Peoples Trust GIC Rates
Peoples Trust is a CIDC-insured trust company based in Vancouver. It is primarily known for its mortgage servicing. It also offers credit cards and high-interest investment options.
Oaken GIC Rates
Oaken Financial is an online bank under Home Bank and Home Trust Company, one of Canada’s largest trust entities. Oaken Financial offers reasonable rates on its long-term non-redeemable GICs. You need to at least lock in $1,000 to have GIC with Oaken Financial.
Hubert Financial GIC Rates
Hubert Financial is an online bank offering deposit services, mortgages, and credit cards. It also offers better GIC rates than big banks.
ICICI Bank Canada GIC Rates
ICICI is an Indian multinational financial and banking service that also operates in Canada and serves a large chunk of the local population.
Canadian Tire GIC Rates
Canadian Tire, the mega-chain retailer, really does sell everything. Yes, even Canadian Tire offers GICs. You can check out their rates here.
How to Get the Best GIC Rates?
GICs offer better interest rates than savings accounts. However, you can also pick the best among betters by choosing the GICs issued by an online bank or a credit union.
Online banks can offer higher GIC rates because they are saving a lot in overhead expenses.
Conclusion
As you can see, online banks offer a much better interest rate than most of the big traditional banks.
Be careful with GICs, as you are locking in your money for the length of the term.
If you need the flexibility of being able to withdraw your money at any time, a high-interest savings account might be better for you.
Check out my list of the best high-interest savings accounts in Canada.
Hey some really good stuff here. Thanks for sharing. I noticed meridians one year is 0.85% not 1.85%
Thanks Tyler! I’ve updated the rate now.