GICs (Guaranteed Investment Certificates) offer a guaranteed return with zero risk to your principal. With rates elevated in 2026, they’re a solid option for money you won’t need for 1–5 years.
Quick answer: Best 1-year GIC rates are 4.00–4.50% at providers like EQ Bank, Oaken Financial, and select credit unions. Hold GICs in a TFSA to avoid paying tax on interest. For money you might need sooner, a high-interest savings account is more flexible.
Best GIC Rates by Term
| Provider | 1-Year | 2-Year | 3-Year | 5-Year | Minimum |
|---|---|---|---|---|---|
| EQ Bank | 4.25% | 4.00% | 3.75% | 3.50% | $100 |
| Oaken Financial | 4.30% | 4.10% | 3.85% | 3.60% | $1,000 |
| Peoples Trust | 4.20% | 4.00% | 3.80% | 3.55% | $1,000 |
| Tangerine | 4.00% | 3.80% | 3.60% | 3.40% | $0 |
| Simplii Financial | 4.10% | 3.85% | 3.65% | 3.45% | $100 |
| Scotiabank | 3.50% | 3.25% | 3.10% | 3.00% | $500 |
| TD Bank | 3.40% | 3.20% | 3.00% | 2.90% | $500 |
| RBC | 3.30% | 3.10% | 2.90% | 2.80% | $500 |
Rates as of early 2026. Non-redeemable (locked-in) GICs shown — redeemable GICs pay less.
GIC vs HISA: When to Use Each
| Factor | GIC | HISA |
|---|---|---|
| Rate | Typically 0.25–0.75% higher | Slightly lower |
| Access to money | Locked for the term | Anytime |
| Rate guarantee | Fixed for the full term | Can drop at any time |
| Best for | Money you won’t need for 1–5 years | Emergency fund, short-term savings |
| CDIC insured | Yes | Yes |
| TFSA/RRSP eligible | Yes | Yes |
How Much Interest a GIC Earns
| Amount Invested | 1-Year at 4.25% | 3-Year at 3.80% | 5-Year at 3.50% |
|---|---|---|---|
| $10,000 | $425 | $1,186 | $1,877 |
| $25,000 | $1,063 | $2,965 | $4,693 |
| $50,000 | $2,125 | $5,930 | $9,386 |
| $100,000 | $4,250 | $11,860 | $18,771 |
Compound interest calculated annually.
GIC Laddering Strategy
Instead of locking all money into one GIC, spread it across multiple terms:
| Year | Action | Term | Example Amount |
|---|---|---|---|
| Now | Buy GIC #1 | 1-year | $10,000 |
| Now | Buy GIC #2 | 2-year | $10,000 |
| Now | Buy GIC #3 | 3-year | $10,000 |
| Now | Buy GIC #4 | 4-year | $10,000 |
| Now | Buy GIC #5 | 5-year | $10,000 |
| Year 2 | GIC #1 matures → reinvest in 5-year | 5-year | $10,000 + interest |
| Year 3 | GIC #2 matures → reinvest in 5-year | 5-year | $10,000 + interest |
Benefits: You get the higher 5-year rate, but 1/5 of your money becomes available every year.
Types of GICs
| Type | Features | Best For |
|---|---|---|
| Non-redeemable | Highest rate, locked for full term | Money you definitely won’t need |
| Cashable/Redeemable | Can withdraw early (lower rate) | Uncertain timing |
| Market-linked | Return tied to stock market | Risky — often poor returns |
| TFSA GIC | Interest is tax-free | Most Canadians |
| RRSP GIC | Tax-deferred | Retirement savings (conservative) |
GIC vs Index ETF: Long-Term Comparison
| Investment | 10-Year Return on $50,000 |
|---|---|
| 5-year GIC at 3.50% | $70,500 (+$20,500) |
| HISA at 4.00% | $74,000 (+$24,000) |
| Bond ETF (ZAG) at 4.50% | $77,500 (+$27,500) |
| Balanced ETF (XBAL) at 7.5% | $103,000 (+$53,000) |
| Stock ETF (XEQT) at 9.5% | $124,500 (+$74,500) |
GICs are guaranteed but sacrifice significant growth over 10+ year periods. Use GICs for short-term money (1–5 years) only.
Bottom Line
GICs are perfect for money you won’t need for 1–5 years and want guaranteed returns. Use a GIC ladder across multiple terms for the best balance of rates and flexibility. For money you might need sooner, a HISA is better. For money you won’t need for 5+ years, index ETFs will almost certainly outperform.
For related guides, see best savings accounts and how to start investing in Canada.