The Best GIC Rates In Canada 2022 | Yore Oyster

May 11, 2022
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Investing in the best GIC rates in Canada is not a great way to get rich, but it is a good way to safeguard your money. Guaranteed Investment Certificates (GICs) are a safe, secure investment with low risk and low reward: when you invest in GICs, you don’t have to worry about stock market volatility, since the CDIC guarantees you’ll receive at least your initial deposit back.

In this post, I break down what GICs are, the differences between GICs and other types of investments, the best GIC rates in Canada over 1-year, 3-year and 5-year terms, and a lot more. If you’re considering investing in Canadian GICs, you’re in the right place.

What Are GICs?

Guaranteed Investment Certificates (GICs) are a form of investment that allows you to invest your cash with a financial institution for a set length of time. In exchange, you’ll be paid a certain amount at maturity, which includes the money invested and the rate agreed.

Why Invest In GICs?

GICs are low-risk investments that complement a portfolio’s fixed income component. They’re also suitable for conservative investment portfolios or a portion of any portfolio’s overall fixed income component. GICs are comparable to savings accounts in which you deposit money and earn interest each year according to the bank’s terms and conditions: GIC rates are also similar to savings account rates.

However, unlike a regular savings account, a traditional GIC usually keeps your money locked up for the duration of the time specified in your agreement.

Pros

  • Predictable: Rates are usually agreed upon when you buy GICs, and the financial institution guarantees how much you’re getting.
  • Versatile: GICs come in different sizes and shapes. Different rates, different terms, there’s a GIC for everyone.
  • Protected: Deposits are protected by the CDIC or a comparable institution. Worst case scenario, you receive your deposit back.

Cons

  • Rates: Some GIC’s rates are lower than some high-interest savings accounts – and they provide a lot more liquidity.
  • Liquidity: If you need to withdraw your money, you may be penalized for early withdrawal or not get your money at all.
  • Returns: You won’t be seeing huge returns with a GIC.
  • Minimum investment: This varies, but it generally starts at $500.

One of the most important factors to look out for when choosing a GIC is the term. You have to keep your long-term plans in mind since your money might be locked-out for a long period.

Here’s a list of the best GIC rates for 1-, 3-, and 5-year GICs:

The Best GIC Rates In Canada

Best 1-Year GIC Rates In Canada

Currently, Hubert Financial offers the best GIC rates for 1-year GICs, sitting at 2%. Oaken Financial closely follows it with a rate of 1.90%, and Saven Financial with 1.85%. CDIC insures all GICs on this list, and they all share a minimum investment of $1,000. Wealth One and Wyth Financial share fourth place with a 1.80% GIC rate.

Financial InstitutionGIC Rate
Hubert Financial2.00%
Oaken Financial1.90%
Saven Financial1.85%
Wealth One Bank Canada1.80%
Wyth Financial1.80%
Peoples Trust1.75%

Best 3-Year GIC Rates In Canada

Currently, Wealth One Bank offers the highest GIC rates in Canada for 3-year GICs: 2.50%. Close behind is one of the biggest online banks in Canada, EQ Bank, followed by Oaken Financial GIC rates of 2.40%. All GICs on this list have a minimum investment of $1,000 – except Home Bank, which has a $5,000 minimum. CDIC insures all GICs.

Financial InstitutionGIC Rate
Wealth One Bank Canada2.50%
EQ Bank2.40%
Oaken Financial2.40%
Home Bank2.36%
Equitable Bank2.35%
Saven Financial2.35%

Best 5-Year GIC Rates In Canada

Currently, Hubert Financial also holds the top spot for the 5-year GICs, with a rate of 3.00%. It is followed by Wealth One, Oaken Financial, and Saven Financial, with GIC rates of 2.75%, 2.70%, and 2.65%, respectively. All GICs on this list are insured by CDIC and have a minimum investment of $1,000.

Now, if you’d rather stick with a single financial institution for all your GICs, here are the best GIC providers in Canada.

Financial InstitutionGIC Rate (%)
Hubert Financial3.00
Wealth One Bank Canada2.75
Oaken Financial2.70
Saven Financial2.65
Motive Financial2.60
Peoples Trust2.60

The 6 Best GIC Providers In Canada

1) Hubert Financial GICs

First, we have Hubert Financial. It currently provides the highest GIC rates for 1-year and 5-year GICs. Their GIC rates from 2 to 4 years aren’t that high; Hubert Financial’s biggest benefits are their competitive rates for 1-year and 5-year GICs. The minimum investment is $1,000.

TermGIC Rates
1-year2.00%
2-year1.60%
3-year1.95%
4-year1.80%
5-year3.00%

2) Saven Financial GICs

Saven Financial is ideal for investors looking to save; whether you’re looking for HISAs or GICs, Saven has you covered. Its primary attractions are its 3- and 5-year term GIC rates. The minimum investment is $1,000.

TermGIC Rates
1-year1.85%
2-year2.05%
3-year2.35%
4-year2.45%
5-year2.65%

3) Wealth One Bank GICs

Wealth One bank opened in 2016 to focus on providing online banking services to Chinese Canadians. Wealthbank is the most well-balanced GIC provider, offering competitive GIC rates for 1-, 3-, and 5-year GICs. The minimum investment is $1,000.

TermGIC Rates
1-year1.80%
2-year2.10%
3-year2.50%
4-year2.60%
5-year2.75%

4) Home Bank GICs

Home Bank’s primary focus lies on mid-length GICs, shining for its 3-year rates. It has the highest minimum investment of all GICs on this list, starting at $5,000.

TermGIC Rates
1-year1.47%
2-year2.06%
3-year2.36%
4-year2.38%
5-year2.49%

5) Oaken Financial GICs

Oaken Financial, a branch of Home Trust, was launched in 2013, but its parent company was founded more than 30 years ago. Like Wealth One Bank, it has very balanced GICs, all ranking highly on 1-, 3-, and 5-year GICs.

TermGIC Rates
1-year1.85%
2-year2.10%
3-year2.40%
4-year2.50%
5-year2.70%

6) EQ Bank GICs

EQ Bank is a branch of Equitable Bank, a fully online bank with over 900 employees across Canada. EQ Bank ranks highly for 3-year GIC rates. The minimum investment is 1,000.

TermGIC Rates
1-year1.55%
2-year2.10%
3-year2.40%
4-year2.40%
5-year2.50%

How To Buy GICs

#1 Decide How Much You Want To Invest

With most GICs, the contract terms will tie up your cash for the term specified. You’ll have to pay the penalty if you withdraw your funds early. If you believe you may need access to your money sooner rather than later, consider purchasing a redeemable or cashable GIC that can be redeemed without cost at any time.

#2 Choose A Type Of Interest Rate

You can choose fixed GIC rates if you want a certain interest rate for the whole term of the GIC. If you’re confident in the prospect of changing interest rates, an index-linked or market-linked GIC might be a better fit for you.

#3 Do Your Research

Choose which of the GICs we listed suits you the best. Compare and look for the most competitive GIC rates available, and talk to different banks and financial institutions before committing.

#4 Choose A Financial Institution And GIC

Once you’ve chosen the type of GIC that better suits you, it’s time to choose the provider. Keep in mind that even though the big six banks have bigger brand recognition, their rates aren’t as good as some of the online banks we mentioned.

Difference Between GICs And Other Investment Options

GICs vs. High-Interest Savings Accounts

GICs and high-interest savings accounts (HISA) are similar investment options. They’re both low-risk, low-reward investments that rely on interest paid annually.

The distinction is that most GICs have a set rate and term. In contrast, HISAs features an interest rate that varies constantly and allows the flexibility to withdraw funds at any time.

Financial institutions – and GIC providers – tend to offer interest GIC rates slightly higher than the high-interest savings account, so it may be worth considering to go for a GIC if you can afford to lock in your money for the duration stipulated by the GIC terms.

GICs vs. Mutual Funds

Guaranteed Investment Certificates and mutual funds are very different investment options. Mutual funds have a much higher potential for reward and a higher risk.

In a mutual fund, your money is linked to the stock market, whereas with GICs, you have a guaranteed return, and the CDIC guarantees your initial investment.

Another important difference to consider is that the financial institutions that provide mutual funds have an associated management expense ratio (MER) – usually between 0.5%-1.0%. If you want to invest in the stock market, we recommend going for Exchange-traded funds – these usually have lower fees than mutual funds and are also a good way to diversify your investments.

GIC vs. Bonds

The most significant distinction between GICs and government bonds is that the government guarantees your investment rather than a bank or other financial institutions. Bonds are much more flexible: you may sell your government bonds if the necessity arises. Non-redeemable GICs – and GICs in general – are considerably more limiting.

Are GICs Worth It?

GICs are an outstanding choice for people who have savings they know won’t be needed for a while. They’re a low-risk, low-reward investment choice. Some of the most common scenarios where you might want to put your money on a guaranteed investment certificate (GIC) are:

  • Your child will soon be attending college or university, and you want to put your money somewhere safe.
  • You’re planning a trip or other major purchase. Locking your money may help prevent you from using it for other things.
  • You don’t feel comfortable enough to invest in the stock market.
  • You’re struggling to meet your short-term savings goals. Using a GIC to make your money harder to access can help you save money.
  • You’re retired and want access to the funds for living expenses. In this case, you’d use a redeemable GIC.

In Summary

Investing in the best GIC rates in Canada is not a great way to get rich, but it is a good way to safeguard your money. Guaranteed Investment Certificates (GICs) are a safe, secure investment with low risk and low reward: when you invest in GICs, you don’t have to worry about stock market volatility, since the CDIC guarantees you’ll receive at least your initial deposit back.

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