Best GIC Rates In Canada Of 2022: Reviews & Comparison
Reviewed by Randolph Vialva, MBA
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Do you want to earn good interest on your investment but with low risk? GICs might be the right investment option for you. While the interest rates on GICs are not as high as what you could earn by investing in stock markets, they are much higher than most savings accounts. And, since GICs are low risk, you don’t have to worry about losing your original investment.
In this article, we’ll review the top 10 best GIC rates in Canada for 2022 to help you decide where to invest your money with low risk.
10 Best GIC rates In Canada 2024
You will find several financial institutions in Canada that offer GICs. The interest rate on GICs and the features each institution offers vary, so it’s essential to compare rates before investing. Here are our picks for the top 10 best GIC rates in Canada for 2022.
- Tangerine: Best Overall GIC Provider in Canada
- Oaken Financial: Best for Competitive Rates
- EQ Bank: Best for Ease of Use
- Haventree Bank: Best for Customer Support
- Peoples Bank: Best Rates for Long-term GICs
- Manulife Bank: Best for Various Options
- Home Trust: Best for Market Reputation
- Achieva Financial: Best for Simplicity
- Motive Financial: Best for Low Minimum Balance Requirement
- Scotiabank: Best for Full Range of Conventional Banking Services
What Is GIC?
A GIC or Guaranteed Investment Certificate is a specific secure investment tool or certificate that offers a guaranteed interest rate for a set period. When you invest in a GIC, you lend a set amount of money to a bank for a specific period, usually between one and five years. In return, the financial institution agrees to pay you a guaranteed interest rate on your investment.
What Is A GIC Account?
A GIC account is a fixed-interest investment account that allows you to invest in guaranteed investment certificates. You can open an account for guaranteed investment certificates with banks, credit unions, or online brokerages. Typically, you must deposit a minimum amount to open a GIC account, and some financial institutions may charge a fee to set up the account.
How Does A GIC Work?
A GIC is an agreement between you and a financial institution in which you deposit your money for a set period and earn a guaranteed interest rate. The interest rate on a GIC is usually higher than what you would make from a savings account but lower than what you could earn by investing in stock markets.
How Much Interest Will You Earn On A GIC?
The interest rate on a GIC is set when you purchase the GIC and is guaranteed for the term of the GIC. The interest rate will depend on the type of GIC you are buying, the duration of the GIC, and the financial institution where you purchase the GIC. In general, longer-term GICs offer higher interest rates than shorter-term GICs.
For example, a five-year GIC may offer a higher interest rate than a one-year GIC. Because you agree to tie up your money for a longer period, the financial institution is willing to offer a higher interest rate to compensate you for the inconvenience.
Top 10 Best GIC Rates In Canada April 2024
Tangerine
As a direct banking subsidiary of the Scotiabank of Canada, Tangerine offers exceptionally high-interest rates in Canada for its guaranteed investment certificates, along with several other investments and high-interest savings accounts. Branchless banks benefit from their lower management expense ratio, which translates into higher interest rates.
- No maintenance fees
- GIC account in USD
- No initial investment requirement
- No physical branches
- Lack of loan availability
When you compare the interest rates you will get with any traditional Canadian bank, you will find a higher rate at Tangerine GIC. The 1-year GIC will give you a 4.85% return. In addition, you can open an account entirely online within minutes. Considering the incredible ease of use, the reputation of the Scotiabank, and excellent rates, Tangerine tops our list as the best GIC rate provider in Canada for 2022.
Oaken Financial
Founded in 2013 as a financial market subsidiary of the Home Trust Canada, Oaken Financial lets you choose to open a GIC with one of two issuers – the Home Trust and the Home Bank.
- Two issuers to choose from
- Choice of the interest rate payment terms
- Flexibility of investment and withdrawals
- Buggy mobile app
- $1,000 minimum investment requirement
Oaken Financial offers some of the best GIC interest rates with different terms. They have developed an intuitive calculator that lets you easily see exactly how much interest you will earn and know the tax implications. For instance, if you put in $2,000 for one year, you can earn $102 as interest at 5.10%. Oaken also keeps your deposit secured with CDIC deposit insurance. The platform is an excellent choice if you are looking for competitive compound interest rates.
EQ Bank
Established in 1998 as a direct banking subsidiary of Equitable bank, EQ bank provides some solid interest rates in Canada with their GICs, exchange-traded funds, and high-interest savings accounts.
- Excellent rates
- Both registered GICs and non-registered accounts GICs
- Only $100 initial investment requirement
- No direct ATM access
- Not a full-service bank
EQ Bank lets you open both a registered account and a non-registered account GICs, and both come with an interest rate of 5% or higher. You can also choose from various payment term options and may opt to take payment at maturity. It’s very easy to open an EQ bank account. You can complete the entire process from their mobile app within minutes.
Haventree Bank
Haventree Bank is a specialized bank for mortgage and GIC investment. They particularly emphasize providing the best customer service and financial advice, which has made Haventree one of the best GIC providers.
- Plenty of term options
- Excellent customer service
- Availability through financial advisers
- Not a lot of account options
- High minimum deposit requirement
Haventree bank lets you purchase a 12-months GIC plan with a minimum deposit of $5,000. Currently, they offer a 5.03% interest earned at maturity. If you opt for monthly payments, the interest rate comes down to 4.83%. To open a GIC account, you can book a financial advisory session with one of the bank’s advisors. CDIC protects your deposit at Haventree bank for up to $100,000.
Peoples Bank
Peoples Bank is one of Canada’s most reputable financial institutions for savings and investments, where you can get fixed and guaranteed GIC rates for the investment period.
- 30-day to 5-year terms with compound interest
- Fixed-rate GICs all through
- E-statements
- Limited customer service
- $1,000 minimum investment requirement
Peoples Bank lets you choose from 30 days to 5 years for your GIC terms. The platform does not charge any transfer or maintenance fees. You will get 3.40%-4% rates for short-term GICs for up to 9 months. Long-term GICs of 1 to 5 years in validity give you around 5% compounded annually.
Manulife Bank
Manulife Bank is a pioneer of the direct banking industry in Canada. Like several other branchless banks, Manulife also offers some of the most competitive GICs and high-interest savings account options.
- Zero fees
- Availability of TFSA, RRSP, and RRIF accounts
- GIC transfers
- Maintenance fee for savings accounts
- $2,500 minimum investment requirement
Manulife is one of the most easily accessible financial institutions in Canada. It lets you quickly and easily open a GIC entirely online. You can also easily transfer between your Manulife savings and investment accounts.
Manulife’s 3-year GIC features the highest interest rate among its options, with a 5.11% interest rate per annum.
Home Trust
Founded in 1977, Toronto-based Home Trust has gained a strong reputation in the Canadian financial market for a mortgage, credit card and various deposit products. Their GICs are no different: you will get CDIC deposit insurance coverage and a guaranteed fixed interest rate.
- Cashable or redeemable GICs
- Choice of issuers
- Long history of operations
- Lack of full-range of banking service
- Minimum $2,500 deposit requirement
Home Trust has various GIC options, and you can choose from both redeemable and non redeemable GICs. The 1-year GIC currently pays a 5.12% annual interest rate, which is the highest among all the Home Trust GIC packages.
Achieva Financial
Founded in 1998, Achieva Financial is one of the first direct or online banks. Acheiva has developed an excellent online banking platform where you will get competitive GIC rates.
- Easy interest transfer to other accounts
- Unlimited guarantee from Deposit Guarantee Corporation of Manitoba
- High flexibility
- $1,000 minimum investments
- No GIC option for less than one year
Achieva Financial offers GICs from one to five-year terms. The interest rate is 4.70% for 1-year GIC and 5% for 5-year GIC, paid annually. Unlike the CDIC deposit insurance of up to $100,000, Achieva offers unlimited insurance.
Motive Financial
Motive Financial offers a highly user-friendly online banking platform in Canada where you can comfortably get all the consumer banking facilities.
- Multiple ways to receive interest
- Interactive calculator to easily forecast GIC rates calculated
- CDIC protection
- No guaranteed investments shorter than 1 year
- A Limited number of free withdrawals from savings accounts
Motive Financial is one of the few financial institutions in Canada where you can open a 10-year GIC. Most competitors offer up to 5 years maximum. They provide highly competitive rates of up to 5.20%, compounded annually for five years or longer. Motive Financial only offers nonredeemable GICs. In the event of an emergency before maturity, you can withdraw these at zero interest.
Scotiabank
One of Canada’s Big Five banks, Scotiabank has been in operation for nearly two centuries. They offer GICs with terms starting from 30 days up to 10 years.
- Great interest rate for long-term savings
- Special promotional offers
- Cashable GICs
- High principal investment requirement
- Fees for several banking services
For a 1-month GIC at Scotiabank, you can earn 0.95% interest and for a 5-year GIC, you can earn 3.25%, compounded annually. Moreover, Scotiabank is one of the few GIC platforms in Canada where you can get cashable and market-linked GICs ensuring great convenience and liquidity.
The Guaranteed Income Optimizer GIC plan by Scotiabank lets you open a GICs for up to 10 years at a 3.50% interest rate.
Methods To Invest In A Gic
Ideally, you can open a GIC at banks or credit unions where you currently do your banking. This helps you quickly transfer your GIC investment fund from your existing account.
To get the best GIC rates, you might have to open an account at a financial institution that offers higher interest rates.
A few other methods to invest in a GIC include:
- Directly with a financial institution
- Through an online GIC broker
- Through a financial adviser or consultant
What Do You Need To Open Gic Account?
To open a GIC account, you’ll need the minimum amount required to open the GIC at your chosen institution. The minimum amount can vary depending on the financial institution.
Once you’re ready to open a GIC, you may need to provide information such as your name, contact details, and Social Insurance Number (SIN).
In addition, you must also indicate the following statement regarding your GIC:
- Type of GIC you want to purchase (cashable, redeemable, or non-redeemable)
- Amount you want to invest
- GIC investment term
- Interest payment frequency
Factors To Choose The Best GIC For You
When you’re choosing a GIC, there are a few factors you need to take into consideration to ensure you’re getting the best GIC rates.
GIC Types
Your primary task is to decide what type of GIC you want. The three main types of GICs are cashable GICs, redeemable GICs, and non-redeemable GICs.
Cashable GICs allow you to cash in your GIC before maturity. However, you will likely earn a lower interest rate than you would with a redeemable or non-redeemable GIC.
Redeemable GICs allow you to cash in your GIC before maturity, but you may have to pay a penalty for early withdrawals. The interest rate on redeemable GICs is usually higher than on cashable GICs.
Non-redeemable GICs have the highest rates because you’re committed to keeping your money invested until maturity.
GIC Investment Term
The term is the length of time you agree to put your money in the GIC deposits. GIC investments can range from 30 days to 10 years. Longer terms typically give you a higher return.
However, you need to ensure you can keep your money invested for the entire term. If you cash in your GIC before the maturity date, you may be charged a penalty fee.
Interest payment frequency
You can choose from two options – interest paid at maturity or interest paid periodically. If you choose interest paid at maturity, you won’t receive any interest payments until the GIC matures. With interest paid periodically, you’ll receive interest payments throughout the term of the GIC.
The frequency of the interest payments will depend on the financial institution. Some offer monthly interest payments, while others offer quarterly or yearly payments. Some institutions also let you choose from fixed and variable-rate GIC investments.
When investing in a GIC, you will also want to ensure that the issuing institution has approval from a financial services regulatory authority.
Final Thoughts
GICs are a low-risk and reliable investment option with guaranteed interest rates. Tangerine is the best overall choice for opening a GIC in Canada. When choosing a GIC, it’s essential to compare different institutions’ interest rates and terms to find the best deal. Be sure to consider the features of the institution and the terms and conditions associated with opening and maintaining a GIC.
Frequently Asked Questions (FAQs)
The main disadvantage of a GIC is that your money will remain tied up for the duration of the GIC, and you may not access it without paying the penalty.
A few investments may offer better returns than a GIC, such as the stock market, mutual funds, and bonds. However, these investments are also riskier than GICs, so you should weigh the pros and cons before deciding what’s best for you. Your decisions should depend on your expected returns and risk tolerance.
When a GIC matures, you will have the option to cash it in or reinvest it. You will receive the principal plus any interest accrued if you cash it in. If you reinvest it, you will purchase a new GIC with a new term and interest rate.
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- Home. cdic.ca. Accessed November 21, 2022. https://www.cdic.ca/