Let’s talk about money today, and specifically, how to grow it in a GIC (Guaranteed Investment Certificate). I am going to explore the best seven GIC rates in Canada for the forthcoming year, but before I do, I will give you a little overview of what a GIC is.
A Guaranteed Investment Certificate, or GIC, is a safe investment product issued by financial institutions such as banks, trust companies and credit unions. When you set up a GIC, you loan a bank a sum of money for a fixed period of time (the term). The bank reinvests it in securities or loans. For the use of your money, the bank pays you a guaranteed rate of interest monthly, quarterly, semi-annually, or annually. When the term ends, (at maturity date), the bank returns your money together with the interest that you have earned. GICs are safe because they are not influenced by the changes in the markets or the economy. GICs are great investment vehicles for people who don’t like risk.
There are registered and non-registered GICs.
Government-registered plans and accounts, like RRSPs, FHSAs, TFSAs and RESPs, let you grow your savings tax-free or offer a tax advantage. Non-registered accounts offer no tax benefits, in other words, you will have to pay tax on your investment, but they usually have more flexibility as to the contribution limit (you can put more money into them).
Here are some of the best GIC rates for 2024 in Canada:
Huberts Happy Savings and Ideal Savings
Hubert Happy Savings and Ideal Savings offer the most competitive rates for GIC accounts on the Canadian market today. For example, a one-year GIC rate is 5.5% annually! There is a minimum balance of $1,000 required at both financial institutions.
For Hubert Happy Savings’ one-year GIC, interest is calculated daily and compounded quarterly. For 2-5 year terms, interest is calculated and compounded annually. There are both registered and non-registered GICs available at Hubert’s and there are no transaction fees.
Ideal Savings also offers tax free term savings and all GICs are automatically renewed upon maturity for the same term, unless instructed otherwise.
Peoples Bank GIC Rates
Peoples Bank offers highly competitive GIC rates in Canada right now. The terms range from 6-months to 5 years. Peoples Bank doesn’t offer a 3-month term for non-registered accounts. It offers, however, one of the highest rates for a six-month term (5%) and a one-year term (5.4%). The rates for two-year, three-year, four-year and five-year terms are: 4.75%, 4.50%, 4.65%, and 4.50% respectively.
EQ Bank GIC Rates
EQ Bank offers pretty great GIC rates as well. The terms range from 3 months to 5 years. The rates vary slightly at the three and six-month terms for a registered and non-registered accounts. Specifically, the rate for a three-month non-registered account is 3.75 % and 4% for a registered account. There is also a 0.25 % difference between a six-month non-registered account and a registered one. All the other rates (1-year, 2-year, -3-year, 4-year and 5-year) are the same for registered and non-registered accounts.
Achieva Financial and Outlook Financial
Achieva Financial and Outlook Financial both offer the same rate of 5.30% for a one-year GIC. The money can be held in a registered account such as TFSA, FHSA, RRSP or RIF for tax advantage. The minimum deposit for both is $1,000.
Achieva’s remaining rates are as follows:
- two-year GIC rate is 5.25%,
- three-year 4.90%,
- four-year is 4.80%
- and five-year is 4.70%.
Achieva’s GIC interest rates are yearly, with interest calculated and paid on each 12 month anniversary date, and at maturity. The term interest rates are guaranteed for their specific duration and are not redeemable prior to maturity.
Outlook Financial’s rates are as follows:
- two-year GIC rate is 5.30%,
- three-year 5%,
- four-year is 4.90%
- and five-year is 4.70%.
Outlook’s Financial’s GIC interest rates are yearly, with interest calculated and paid on each 12 month anniversary date, and at the maturity date. Term rates are guaranteed for their specified duration and are not redeemable prior to maturity.
Motive Financial
Motive Financial is another financial institution that is relatively unknown to general public. It is an online division of Canadian Western Bank. It offers a wide range of GICs including TFSA and RRSP GICs with terms ranging from one to ten years. All Motive Financial’s GICs offer relatively high fixed interest rates. Customers have the flexibility to receive annual interest payments or compound till maturity. People over the age of 57 can choose to receive monthly interest payments from GICS if they invest in a one-year GIC or longer.
The above financial institutions offer competitive GIC rates, usually much better than the traditional banks’. That is why you can grow your money faster if you invest with them.
Happy investing!
