Investments / GIC
GICs: Guaranteed Growth for Your Savings
A Guaranteed Investment Certificate protects your money and pays a guaranteed return. It is a simple, low-risk way to grow savings you don’t want to put at risk.
With a GIC, you lend money to a bank, credit union or insurance company for a set term, and they guarantee your principal and your interest. GICs can be held on their own or inside a TFSA, RRSP, RRIF, RESP or FHSA, so the interest can be tax-free or tax-deferred.
GICs at a glance
- 100%Your principal is guaranteed
- 30 days to 5 yearsTypical terms to choose from
- Fixed or variableLock in a rate, or choose a rate linked to the prime rate or the market
- CDICEligible deposits at member banks are insured up to $100,000 per category
- Monthly to at maturityChoose how often interest is paid
- Any accountHold GICs in a TFSA, RRSP, RRIF, RESP or FHSA
Types of GICs
Non-redeemable
The best rates. Your money is locked in until the end of the term.
Cashable or redeemable
Take your money out early, usually after 30 or 90 days, for a slightly lower rate.
Market-linked
Your principal is guaranteed and your return is tied to a stock market index, with a minimum and maximum.
Escalating rate
The rate rises each year of the term, rewarding you for staying invested.
GIC strategies
Build a GIC ladder
Split your money across 1- to 5-year terms. Each year one matures, giving you access to cash and the chance to reinvest at current rates.
Use them for near-term goals
Saving for a home, car or tuition in a few years? A GIC protects the money until you need it.
Learn more →Balance your portfolio
GICs add stability next to growth investments, especially as you approach retirement.
Learn more →Frequently asked questions
Are GICs safe?
Yes. Your principal is guaranteed by the issuer, and eligible deposits at CDIC member institutions are insured up to $100,000 per insured category. Credit union and insurance company GICs have their own protection programs.
How is GIC interest taxed?
Outside a registered account, interest is taxed every year as income, even if it is only paid at maturity. Inside a TFSA it is tax-free, and in an RRSP or RRIF it is tax-deferred.
Can I get my money out early?
Only with a cashable or redeemable GIC. Non-redeemable GICs usually cannot be cashed before maturity, except in special cases such as death.
GIC or savings account?
A GIC usually pays more in exchange for locking in your money. A high-interest savings account is better for money you may need at any time.
Talk to Devendra Kumar, Financial Planner (CLU, CHS)
DK Insurance & Investment Inc. serves families across the GTA from offices in Vaughan, Mississauga and Brampton. Call or text +1-647-761-0517 for a free, no-obligation conversation.