GIC Calculator

There are a variety of GICs in Canada, and they can be categorized by their redemption method, interest structure, currency, and account type. Here's a look at some of those types and differences.

Redemption method

Interest structure

Account type

GIC interest earned in a non-registered (i.e., taxable) account is treated as interest income, which is taxed just like your employment income, even if you reinvest it or don’t receive it in cash.

GIC interest earned in a registered account is treated differently, depending on the investment type.

If your GIC interest in a non-registered account is $50 or more, your financial institution will issue a T5 slip by the end of February. This amount is reported on Line 12100 (“Interest and other investment income”) of your T1 tax return.

In most cases, you can't lose your initial investment with a GIC, but there are exceptions.

Generally, your GIC principal is guaranteed by the issuing financial institution and, in most cases, insured by the Canada Deposit Insurance Corporation.

However, if you hold GICs in a foreign currency, exchange rate fluctuations could reduce the value when converted back to Canadian dollars.

Additionally, if you withdraw early from a non-redeemable or cashable GIC, you may incur penalties or receive less interest than expected.

To decide which GIC term length is right for you consider how much you want to earn and how soon you may need to access the money.

If you think you'll need GIC funds soon — for emergencies, planned expenses, or uncertainty — then a shorter-term or cashable GIC is best because they offer more flexibility, albeit at lower interest rates.

If you're sure you won't need the money in the near future, longer-term GICs typically provide higher interest rates, making them a solid way to get the most from your savings.

A GIC often makes sense when you want higher, guaranteed returns and can afford to lock your money away for a while, whereas a high-interest savings account (HISA) is better when you want the ability to access your money without penalty.

A GIC ladder can be a smart strategy if you want steady returns while still having some money come back to you regularly.

Instead of putting all of your funds into one GIC, you split the amount between several GICs with different term lengths, like one year through five years.

When the shortest-term GIC matures, you can either withdraw that money or reinvest it into a new long-term GIC.

This way, you’ll always have a GIC maturing each year, which allows you to earn competitive interest rates while having access to some of your money on a regular basis.

Financial institutions in Canada are required to provide clear and easy-to-understand information — in writing — before you sign up for a GIC.

Be sure you look for and fully understand the following information. If you don't, ask questions of a qualified financial professional before you proceed.