How (and where) to find the best GIC rates.
Updated: Oct 9
Original article by:
Ben Cousins
Yahoo! Finance
October 18, 2023
📰 Read the FULL ARTICLE here.
I spoke with Yahoo Finance Canada about how to find the best GIC rates. Here are the highlights and my contributions.
Key Takeaways
Higher interest rates have made GICs an appealing, low-risk option, since your original contribution is guaranteed.
Rates vary between institutions, and smaller or online banks often beat the big six.
Your money is locked in for a set term, anywhere from 30 days to 10 years.
Check whether interest is paid annually or only at maturity before you commit.
GIC interest is fully taxable, so consider holding GICs in a TFSA or RRSP.
My Perspective
The easiest way to get a better return on a GIC is to shop around. Rates can differ quite a bit from one bank to the next.
"Honestly, a quick Google search goes a long way."
Because your money is locked in until the term ends, I suggest putting only part of your savings into GICs and keeping enough accessible for emergencies.
"You don't necessarily want to tie up all of your money in a GIC and then not have access to liquid funds if you need it."
Pay attention to when interest is paid. If it's only paid at maturity, cashing out early means giving up that growth. Taxes matter too: if a multi-year GIC compounds annually in a non-registered account, you'll get tax slips for interest you haven't received yet.
"You'll be paying taxes on money that you haven't actually received yet."
Originally published in Yahoo Finance by Ben Cousins on October 18, 2023. Use the link at the top of this post to read the full article.
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