Updated: April 2025  |  bremo.io financial guides

GIC Guide Canada: Everything You Need to Know 2025

A Guaranteed Investment Certificate (GIC) is one of Canada's most popular low-risk savings vehicles. When you buy a GIC, you lend money to a bank or credit union for a set period and receive a guaranteed interest rate in return. Your principal is protected, and your return is locked in from day one.

This guide explains how GICs work, the different types available, where to get the best rates, and when a GIC makes more sense than a savings account or market investment.

How GICs Work

When you purchase a GIC, you deposit a lump sum (the principal) with a financial institution for a fixed term — typically 30 days to 5 years. The institution guarantees to return your principal plus interest at the end of the term. The interest rate is fixed at purchase, so you know exactly what you'll earn regardless of what happens to interest rates while your money is invested.

Types of GICs

Non-Redeemable GIC

The most common type. You cannot access your money before the term ends (or face a penalty if you can). In exchange, you get a higher rate than cashable alternatives.

Cashable GIC

Allows early redemption after a short lock-in period (often 30–90 days) without penalty. Rates are slightly lower than non-redeemable GICs but you retain flexibility.

Redeemable GIC

Can be cashed in at any time, but early redemption typically results in a reduced interest rate being applied retroactively.

Market-Linked GIC

Your return is tied to the performance of a market index (e.g., TSX or S&P 500). Principal is still guaranteed, but your interest earned could range from 0% to a capped maximum.

GIC Terms

Terms typically range from 30 days to 5 years. Longer terms generally offer higher rates, but you sacrifice flexibility. One-year and two-year GICs tend to offer a good balance of rate and liquidity for most savers.

Where to Buy GICs in Canada

• Big banks (TD, RBC, BMO, Scotiabank, CIBC) — convenient but often lower rates
• Online banks and trust companies (EQ Bank, Oaken Financial, Peoples Trust) — typically much better rates
• Credit unions — competitive rates, often with provincial deposit insurance
• Brokerages — purchase GICs from multiple institutions in one account

CDIC Protection on GICs

GICs with terms of 5 years or less at CDIC-member institutions are insured up to $100,000 per deposit category. This means a $100,000 GIC in a non-registered account and another $100,000 in a TFSA GIC are each separately insured.

GICs Inside Registered Accounts

You can hold GICs inside TFSAs, RRSPs, and FHSAs. A GIC inside a TFSA means your interest grows completely tax-free. A GIC inside an RRSP defers tax until withdrawal. This combination of guaranteed returns and tax efficiency is very powerful for conservative investors.

GIC vs. High Interest Savings Account

If you don't need access to your money for a set period, a GIC almost always offers a higher rate than a HISA. The trade-off is liquidity — once locked in a non-redeemable GIC, your money is inaccessible. Use a HISA for your emergency fund and short-term needs; use GICs for money you won't need for 1–5 years.

GIC Laddering Strategy

Rather than putting all your money into one long-term GIC, spread it across multiple terms (e.g., 1, 2, 3, 4, 5 years). As each GIC matures, reinvest it for another 5-year term. This strategy provides both high rates and regular liquidity as GICs mature each year.