- Non-redeemable GICs pay more than cashable ones: Meridian Credit Union’s 1-year rate was 3.40% versus 3.00% for its cashable GIC, as of 2026-10-24 in our data.
- CDIC insures GICs at member institutions up to $100,000 per category, and a GIC in a TFSA, RRSP or FHSA counts as a separate category.
- Interest on a GIC outside a registered account is taxed every year as it’s earned, even when it’s only paid at maturity.
- A five-rung ladder of $2,000 GICs at EQ Bank rates earned $407 in its first year, an average of 4.07%.
Checked October 2026
What a GIC is
A GIC is a deposit with a term. You hand over a sum, the institution agrees to pay a set rate for a set period, and at the end you get your money back plus interest. Banks, credit unions and trust companies all issue them. Terms run from 30 days to five years or more, and longer terms usually pay more.
Unlike a stock or an ETF, a GIC can’t fall in value. The trade-off is access: with most GICs your money is locked in until the term ends. That makes GICs a fit for money you’ll need on a known date, such as a down payment in two years, or for the safe part of a long-term portfolio.
Before you buy, a federally regulated institution must tell you the term, the rate, any charges, and whether you can cash the GIC early and what that does to your interest. You can compare current rates on our GIC rates page.
Non-redeemable vs cashable GICs
A non-redeemable GIC, also called non-cashable, can’t be cashed before maturity in normal circumstances. In return it pays the highest rate. A redeemable or cashable GIC lets you take money out early, usually after a short lock-in period, but pays less.
| Institution | 1-year cashable | 1-year non-redeemable | Early cash-in rule |
|---|---|---|---|
| Meridian Credit Union | 3.00% | 3.40% | No interest if redeemed in the first 90 days |
| Oaken Financial | 2.25% | 3.75% | Locked for the first 30 days, then withdraw any time |
| RBC | 1.95% | 2.45% | No interest if cashed in the first 29 days |
Rates are posted, non-registered rates from each institution’s own site and change often.
If there’s a real chance you’ll need the money, a cashable GIC or a high-interest savings account may cost you less than breaking a non-redeemable term. If you won’t touch it, the higher locked-in rate is the reason to buy a GIC at all.
How GIC interest is paid and compounded
Short terms, under a year, usually pay simple interest at maturity. On longer terms you often choose: take the interest out each year (or monthly, often for a lower rate and a higher minimum), or leave it in to compound and collect it all at maturity. EQ Bank, for example, lets you take interest annually as simple interest or at maturity compounded annually. RBC offers monthly payouts on a $5,000 minimum.
Compounding adds up over five years. On $10,000 at 4.30%:
- Interest paid out each year: $430 a year, $2,150 in total
- Interest compounded annually and paid at maturity: $12,343.02 back, or $2,343.02 in interest
Our compound interest calculator runs the same maths for any rate and term.
GIC rates from our data
| Institution | 1 year | 3 years | 5 years | Minimum |
|---|---|---|---|---|
| Oaken Financial | 3.75% | 4.30% | 4.50% | $1,000 |
| EQ Bank | 3.70% | 4.15% | 4.30% | $100 |
| Tangerine | 3.60% | 4.10% | 4.25% | $10 |
| TD | 3.00% | 3.30% | 3.55% | $500 |
| RBC | 2.45% | 2.55% | 2.75% | $500 |
Posted non-registered rates read on each institution’s own website October 14 to 16, 2026. Big banks sometimes run higher special offers for limited terms.
Online banks and some credit unions have posted higher rates than the big five banks across terms in our data. The gap on a five-year term between Oaken Financial and RBC was 1.75 percentage points.
Registered GICs and CDIC coverage
You can hold a GIC inside a TFSA, RRSP or FHSA. Interest earned there isn’t taxed while it stays in the account, so a GIC in a TFSA grows tax-free. EQ Bank pays the same rate on its TFSA, RRSP and FHSA GICs. Check that the institution offers the account you want: some offer TFSA and RRSP GICs but not FHSA ones.
CDIC insures GICs and other term deposits at member institutions, in Canadian or foreign currency, up to $100,000 per category, principal and interest combined. Deposits in your own name, joint deposits, and deposits in each of an RRSP, RRIF, TFSA, RDSP, RESP and FHSA are separate categories. Credit unions are covered by provincial insurers instead: Meridian Credit Union deposits, for example, are insured by Ontario’s FSRA.
How GIC interest is taxed
Outside a registered account, GIC interest is income, reported on line 12100 of your return. The CRA says that for most investments made since 1990 you report interest each year as it’s earned, even on a compound GIC that pays nothing until maturity. Its example: for an investment made on July 1, 2024, you report the interest earned up to June 30, 2025 on your 2025 return.
Your institution sends a T5 slip for the interest. You may not get one if your total investment income is under $50, but you still have to report it.
Building a GIC ladder
A ladder spreads your money across several terms so that part of it comes due every year. You get close to long-term rates while keeping regular access, and you don’t have to guess where rates are heading.
- Split the moneyDivide $10,000 into five $2,000 GICs with terms of one, two, three, four and five years.
- Lock in the ratesAt EQ Bank’s rates in our data (3.70%, 4.00%, 4.15%, 4.20% and 4.30%), the five rungs earn $407 in the first year, an average of 4.07%.
- Roll each rungWhen the one-year GIC matures, reinvest it in a new five-year GIC. Repeat each year. After four years every rung is a five-year GIC, and one still matures every year.
GIC vs savings account vs savings bonds
A high-interest savings account keeps your money available any day, but its rate can change at any time. A GIC fixes the rate for the term in exchange for locking up the money. Many savers use both: a savings account for the emergency fund, GICs for money with a known date.
Canada Savings Bonds used to fill the same role. They’re gone: the federal government decided in 2017 to end the program, and the last bonds matured in 2021. If you want a guaranteed return today, GICs and savings accounts are the main options, and index funds suit money you can leave invested through market swings.
Frequently Asked Questions
What does GIC stand for?
Guaranteed investment certificate. It’s a deposit that pays a guaranteed rate for a fixed term, and your principal is returned at maturity.
Can you lose money in a GIC?
Not from market moves. The rate and principal are guaranteed. If the institution failed, CDIC or a provincial insurer covers eligible deposits up to its limits, which is $100,000 per category for CDIC.
What happens if I need my money from a non-redeemable GIC?
Usually you can’t take it out before maturity. If you think you might need the money, a cashable GIC or a high-interest savings account is the safer choice.
What is a cashable GIC?
A GIC you can cash before maturity, usually after a lock-in of 30 to 90 days. It pays less: Meridian Credit Union’s 1-year cashable rate was 3.00% versus 3.40% non-redeemable, as of 2026-10-24 in our data.
Is GIC interest taxable?
Yes, outside a TFSA, RRSP or FHSA. You report it on line 12100 each year as it’s earned, even if it’s only paid at maturity.
Can I hold a GIC in my TFSA?
Yes. Most banks offer TFSA GICs, and the interest grows tax-free inside the account. Many also offer RRSP and FHSA GICs.
What happens when my GIC matures?
Many GICs renew automatically. A bank must send renewal information 21 days and 5 days before a term longer than 30 days ends, and you can cancel an automatic renewal within 10 business days of the new term starting.
Who has the best GIC rates?
It changes often. As of 2026-10-15 in our data, Oaken Financial posted 4.50% on a five-year non-redeemable GIC, EQ Bank 4.30% and Tangerine 4.25%. Check our GIC rates page for the latest.
Are GICs covered by CDIC?
Yes, at CDIC member institutions, in Canadian or foreign currency. Coverage is up to $100,000 per category, principal and interest combined.
What is a GIC ladder?
Money split across GICs of different terms, often one to five years, so one matures every year. You reinvest each maturing GIC at the longest term.
Try this next
Sources, checked October 2026
- CDIC: What’s covered cdic.ca
- CDIC: How deposit insurance works cdic.ca
- CRA: Line 12100, Interest and other investment income canada.ca
- FCAC: Guaranteed investment certificates and term deposits, know your rights canada.ca
- Bank of Canada: Annual Report 2021 bankofcanada.ca
- GICs | EQ Bank eqbank.ca
- Oaken Financial: Our GIC rates oaken.com
- GIC Interest Rates | Tangerine tangerine.ca
- GIC rates | TD Canada Trust td.com
- GIC Rates | RBC Royal Bank rbcroyalbank.com
- GIC rates | Meridian meridiancu.ca
- GetSmarterAboutMoney.ca: How exchange-traded funds work (registered account tax) getsmarteraboutmoney.ca
General information for Canadians, not financial, tax or legal advice. Rules and menus change, so confirm details with your bank, lender or the Government of Canada. See our methodology.