GICs Explained

A GIC or Guaranteed Investment Certificate is a Canadian term deposit investment that in most cases provides investors with guaranteed rates of return.† GICs are typically classified as conservative low risk investments and therefor have returns lower than those anticipated with more riskier investments such as stocks, bonds and mutual funds.†

GICs are offered with terms of 30, 60, 90, 120, 180, and 270 days, and in annual maturities of between one and 10 years. GICs offered by most financial institutions with a maturity date of five years †or less, and with a value not exceeding $100,000, are covered by the Canada Deposit Insurance Corporation (CDIC) or Assuris (protection for life insurance products). You may want to check to make sure your deposits are protected through CDIC (, Assuris ( or other provincial deposit insurance programs. †Not all GICs are insured.†

GICs typically have a minimum investment threshold of $500, although this number may be higher if the investor requires interest payments on a regular basis. In most cases there is no maximum purchase amount for any one Certificate. The amount of interest that you receive is a function of who offers the GIC for sale, the amount deposited to the GIC, and the length of time the money is invested. In most cases, the more money invested and the longer the period of investment, the higher the rate of interest offered by a financial institution.

The amount of interest you will receive can be fixed for the duration of the term.† It can also be variable, for example, when the GIC is tied to the performance of a stock market or other index. This type of GIC is called a variable-rate GIC.

Interest on GICs is paid monthly, every three months, twice a year, or once a year, and sometimes only on the maturity date. It is important to align cash needs with payment of interest. GICs will usually be offered a lower interest rate if the interest is to be paid monthly, quarterly, or semi-annually If you are a senior, check with your financial institution for possible exemption from such rate discounts.


Guaranteed Investment Certificates can be purchased through banks, trust companies, credit unions, caisses populaires, insurance companies, investment dealers, and specialized GIC deposit brokers.

GICs can be invested into in non-registered accounts, and are also allowable investments within registered plans or accounts, including Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), Life Income Funds (LIFs), as well as Registered Education Savings Plans (RESPs) and Tax-Free Savings Accounts (TSFAs).

Some investment advisors believe that guaranteed investments like GICs are ideal for registered accounts, because their returns are paid as interest, and if held outside of registered plans, the income would be taxed at oneís marginal tax rate.

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Best GIC Rates

1 Year 1.05%
2 Year 1.35%
3 Year 1.85%
4 Year 2.00%
5 Year 2.05%

Investment Calculators

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