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Published July 28, 2021

What Is a Non-Redeemable GIC?

Non-redeemable GICs have fixed rates and predictable returns. That security comes with an important caveat, though: You can’t access your funds until they mature.

Guaranteed investment certificates (GICs) are considered to be one of the safest forms of investing — as their name implies, they’re guaranteed. However, with several types of GICs available, it’s important to understand the differences.

Non-redeemable GICs tend to offer the highest interest rates, but they have strict contracts. Here’s what you should know.

How does a non-redeemable GIC work?

A non-redeemable GIC is an investment option that provides higher interest rates for locked-in investments. Unlike cashable GICs or redeemable GICs, these investments are not liquid. Once you choose your set time period, or term, your money is locked away for the full duration. When your non-redeemable GIC matures, you can withdraw the money along with the earned interest or, if you prefer, you can renew the GIC so the money continues to grow.

Non-redeemable GIC terms vary. You can get terms that are just 30 days or as long as 10 years. Generally speaking, the longer the term, the better the interest rate (typically up to 2%). However, it’s important to keep in mind that breaking your contract is very difficult and will result in penalties. For this reason, non-redeemable GICs are often better options for longer-term investments, like a down payment for a house, where you know you won’t need the money for a certain amount of time. You want to make sure that your investment can fully mature and you can reap the benefits.

How to get a non-redeemable GIC

Non-redeemable GICs are popular GIC options and are offered by the majority of Canadian banks and credit unions. Make sure to take the time to shop around for the best terms and interest rates available. When you find one that looks like a good fit, you can open a non-redeemable GIC in person, over the phone or even online.

Keep in mind, it’s also in your best interest to choose a financial institution that’s a member of the Canada Deposit Insurance Corporation (CDIC) or has another type of insurance. This safety precaution will better protect you and your money in case the financial institution runs into trouble. CDIC will cover you up to $100,000 if the financial institution fails.

What to consider when getting a non-redeemable GIC

When choosing a non-redeemable GIC, think about the following features:

  • Term. This can range from 30 days to 10 years. Think about what you are saving for and be sure that you can go that length of time without needing the money. Breaking the contract isn’t easy and will cost you.
  • Minimum investment. How much does the financial institution require you to invest to get started? Many banks require a minimum of $500 or $1,000.
  • Payment frequency. GICs may be paid out monthly, bi-annually, annually or at maturity.
  • Fixed or variable rate. A fixed rate is a static rate, usually up to a maximum of 2%, for the entire term. Variable rates will fluctuate based on the stock market. There is no right or wrong option here; it depends on what you are most comfortable with.

Pros and cons of non-redeemable GICs


  • Considered to be a very low-risk investment option
  • Higher interest rates than cashable or redeemable GICs
  • Broad range of terms to choose from (typically 30 days to 10 years)


  • No liquidity; cannot access funds until GIC matures
  • Breaking the contract is very difficult and will result in penalties
  • While non-redeemable GICs offer the highest rates for GICs, they may not be as lucrative as other investment options, especially over longer periods of time.

» MORE: Should you consider a registered GIC?

  • FAQs

    • Can I break a non-redeemable GIC?

      It is very difficult to break a non-redeemable GIC as you are bound by a contract. If you can demonstrate financial hardship, the financial institution may allow you to break the contract, but it is at their discretion. Even if you’re able to break the contract and access your funds, you will probably face financial penalties.

    • Can you withdraw funds from a non-redeemable GIC before maturity?

      No, you don’t have access to your funds until the GIC matures. If you need the funds, you’ll need to request to break the contract. This is at the financial institution’s discretion and will result in a penalty.

    • Can I lose money on a non-redeemable GIC?

      Only if you break your contract. Since GICs are guaranteed, you can’t lose your capital if you meet your contract and allow the funds to mature for the full term. If you choose a market-linked GIC, you may lose money on the interest earned.

    • Are non-redeemable GICs safe?

      Yes, as long as you are able to keep the money in place until it matures so you don’t incur any penalties. GICs are generally considered to be one of the safest investment options.

About the Author

Hannah Logan
Hannah Logan

Hannah Logan is a writer and blogger who specializes in personal finance and travel. You can follow her personal travel blog or find her on Instagram @hannahlogan21.


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A Guaranteed Investment Certificate (GIC) is a low-risk, fixed-income investment with guaranteed returns. Interest rates vary by type.

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Treasury Bills, also known as T-bills, are 100% guaranteed debt securities issued by provincial and federal governments to raise capital.

Registered vs. Non-Registered GICs

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