Featured Partner Offer
1
Tangerine GIC
APY:
3.25% to 5.25%
Minimum Deposit Requirement:
Not Specified
Terms:
90 days to 5 years
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If you’re seeking a safe and secure investment option, consider a guaranteed investment certificate (GIC). They have become popular amidst ongoing economic uncertainties. Investing in a GIC protects your principal while earning competitive interest rates.
Forbes Advisor compared 504 GICs across 43 financial institutions. The methodology spans eight factors, including APY, deposit requirement, customer service and more. We’ve found the best 5-year GICs in Canada and this article covers their pros, cons and interest rates.
Featured Partner Offer
1
Tangerine GIC
On Tangerine’s Website
APY:
3.25% to 5.25%
Minimum Deposit Requirement:
Not Specified
Terms:
90 days to 5 years
*All rates current as of May 3, 2024. All rates are non-market-linked, non-cashable and non-redeemable.
We compared 504 GICs at 43 financial institutions to find some of the best options available. Learn more about why we picked each GIC, the pros and cons and the rate details.
50% lifetime maximum
$1,000
three-year, five-year
50% lifetime maximum
$1,000
three-year, five-year
The TD Canadian Banking & Utilities GIC (Non-registered and TFSA) offers an impressive rate of return. With a guaranteed range of 15% to 50% across five years, this is one of Canada’s most lucrative GICs. You’ll earn at least 15%, with upside potential contingent on the performance of the underlying stocks. There is a minimum deposit requirement of $1,000 and the cross-sector diversification provides exposure to both Canadian banking and utilities sectors.
The TD Canadian Banking & Utilities GIC for non-registered and TFSA offers blended exposure to Canada’s most stable industries. This GIC contains equal weighting to the S&P/TSX Bank Index and S&P/TSX Capped Utilities Index. As a market-linked GIC, your return is tied to the performance of these benchmarks, within a guaranteed return range. You’ll own iconic Canadian companies such as RBC, TD and Hydro One. Across the five years, you’re guaranteed a 15% minimum lifetime return or a 50% maximum lifetime return. This translates to an annualized minimum return of 2.84%.
35% lifetime maximum
$500
three-year, five-year
35% lifetime maximum
$500
three-year, five-year
The TD Canadian Banks GIC (RSP, RIF, RESP) offers our list’s highest guaranteed minimum return. Across five years, you’re guaranteed a minimum 20% rate of return. This can increase to a maximum of 35%, depending on the S&P/TSX Bank Index performance. Otherwise, this GIC has a low minimum deposit requirement of $500. The availability of RSP, RIF and RESP accounts provides flexibility for investors.
The TD Canadian Banks GIC for RSP, RIF and RESP accounts offers exposure to Canada’s banking industry. The low-risk nature of this sector pairs well with saving for retirement or education. The GIC is linked to the S&P/TSX Bank Index, so the underlying stock performance will influence your GIC return. The index benchmarks Canada’s largest banks, including BMO, RBC, TD and more. Across the five-year investment, you’re guaranteed a minimum 20% return. However, you can earn up to 35% if the underlying stocks increase. This translates to an annualized minimum return of 3.71%. Otherwise, this GIC has a lower deposit requirement of $500.
32% lifetime maximum
$500
three-year, five-year
32% lifetime maximum
$500
three-year, five-year
The TD U.S. Top 500 GIC (RRSP, RRIF, RESP) offers a comparatively high rate of return. Across five years, you’ll earn at least 12%, which can increase to 32% depending on the S&P 500 performance. This makes it an excellent option for those who desire risk-adjusted exposure to the U.S. stock market. The low minimum deposit requirement of $500 positively impacts the score, and the availability of RRSP, RRIF and RESP accounts provides flexibility for investors. The exposure to the performance of the top 500 U.S. companies offers diversification.
The TD U.S. Top 500 GIC for RRSP, RRIF and RESP accounts offers low-risk exposure to the U.S. stock market. The GIC’s performance is tied to the S&P 500 index, including critical companies like Microsoft, Apple and Amazon. Across five years, you’re guaranteed a minimum lifetime return of 12%, with a 32% lifetime ceiling. This translates to an annualized minimum return of 2.29%. Otherwise, the minimum $500 deposit is a nice touch, increasing accessibility.
50% lifetime maximum
$500
three-year, five-year
50% lifetime maximum
$500
three-year, five-year
The TD Canadian Banking & Utilities GIC (RSP, RIF and RESP) offers risk-adjusted exposure to key Canadian industries. Across five years, you’ll earn at least 15%, which can increase to 50% depending on the performance of the S&P/TSX Bank Index and the S&P/TSX Capped Utilities Index. This offers cross-sector diversification with plenty of upside. Otherwise, RSP, RIF and RESP account availability offers investors flexibility.
The TD Canadian Banking & Utilities GIC for RSP, RIF and RESP accounts also offers hybrid exposure to cornerstone industries through leveraging tax-advantaged accounts. Your return is tied to the performance of Canadian banking and utilities stocks, with an equal weighting between the S&P/TSX Bank Index and the S&P/TSX Capped Utilities Index. You’ll invest in RBC, TD, Brookfield and more companies. Across the five years, you’re guaranteed a minimum 15% lifetime return, with a 50% maximum. This translates to an annualized minimum return of 2.84%
35% lifetime maximum
$1,000
three-year, five-year
35% lifetime maximum
$1,000
three-year, five-year
The TD Canadian Banks GIC (Non-registered and TFSA) offers a market-leading minimum guaranteed return. The high minimum five-year guaranteed return of 20% provides a solid base return, and the GIC is linked to the performance of leading Canadian banks, offering exposure to a stable sector. You can earn up to 35% across the five years. The GIC also has a moderately low minimum deposit requirement of $1,000.
The TD Canadian Banks GIC for non-registered and TFSA accounts focuses exclusively on Canada’s largest banks. This includes BMO, RBC, TD and more. The GIC is market-linked, meaning your return varies with the performance of the S&P/TSX Bank Index. A notable feature is the higher minimum lifetime guaranteed return. At 20%, you’ll earn more than alternatives in a poor-performing market, though your lifetime upside is capped at 35%. The return translates to an annualized minimum rate of 3.71%.
32% lifetime maximum
$1,000
three-year, five-year
32% lifetime maximum
$1,000
three-year, five-year
The TD U.S. Top 500 GIC (Non-registered and TFSA) features a healthy rate of return. Across five years, you’re guaranteed to earn at least 12%, with a 32% maximum. The GIC benchmarks the S&P 500, providing robust diversification across the 500 largest U.S. companies. Otherwise, the $1,000 minimum deposit is moderately affordable.
The TD U.S. Top 500 GIC for non-registered and TFSA accounts also offers low-risk exposure to the U.S. stock market. This market-linked GIC indexes the S&P 500, meaning your return is benchmarked to the largest 500 U.S. companies. This includes key players such as Microsoft, Apple, Amazon and more. Across five years, you’re guaranteed a 12% minimum lifetime return, with a 32% ceiling. This translates to an annualized minimum return of 2.29%.
30% lifetime maximum
$1,000
two-year, three-year, five-year
30% lifetime maximum
$1,000
two-year, three-year, five-year
The RBC U.S. MarketSmart GIC offers widespread account availability, providing flexibility for investors. The GIC benchmarks the S&P 500 with a guaranteed 12% minimum return across the five-year term. However, you can earn up to 30% if the underlying stocks increase. The $1,000 minimum deposit is reasonably affordable for many investors. Overall, it’s another great market-linked S&P 500 GIC from Canada’s largest bank.
The RBC U.S. MarketSmart GIC is another low-risk approach to investing in the U.S. stock market. You can hold the GIC using a variety of accounts, including an RRSP, TFSA, RESP, RDSP, RRIF and non-registered options. Your investment return is tied to the S&P 500 index, including Apple, Amazon and Tesla stocks. Regardless of market performance, you’re guaranteed a minimum five-year return of 12%. In contrast, the GIC has a maximum 30% ceiling.
35% lifetime maximum
$1,000
two-year, three-year, five-year
35% lifetime maximum
$1,000
two-year, three-year, five-year
The RBC Canadian Banking MarketSmart GIC boasts a substantial rate of return. Issued by Canada’s largest bank, you’ll earn at least 19% across the five years. However, this can increase to a maximum of 35% with the performance of the underlying S&P/TSX Banks Index. The GIC is widely available across account types, and the $1,000 minimum deposit is within reach for many investors.
The RBC Canadian Banking MarketSmart GIC is a market-linked option that benchmarks Canada’s largest banks. The GIC tracks the S&P/TSX Banks Index, which includes BMO, Scotiabank, CIBC, Canadian Western Bank, Genworth, Home Capital, Laurentian, National Bank, RBC and TD. This GIC provides more diversification than comparable banking-focused options. Otherwise, you can hold the GIC in various accounts, such as an RRSP, TFSA, RESP, RDSP, RRIF and non-registered account. The lifetime return is also lucrative, promising a 19% minimum or a 35% maximum.
50% lifetime maximum
$1,000
two-year, three-year, five-year
50% lifetime maximum
$1,000
two-year, three-year, five-year
The RBC Canadian Utilities MarketSmart GIC offers excellent risk-adjusted returns. At a minimum, you’ll earn 15% across the five-year term. This can increase to 50% with the performance of the S&P/TSX Capped Utilities Sector Index. The return range makes it a lucrative option. The availability of multiple account types (non-registered, RRSP, TFSA, RDSP, RESP, RRIF) provides flexibility for investors. The $1,000 minimum deposit requirement is also within reach for many investors.
The RBC Canadian Utilities MarketSmart GIC focuses on Canadian utilities. This market-linked GIC benchmarks the S&P/TSX Capped Utilities Sector Index. As such, your return varies with the performance of various stocks, including Algonquin Power, Fortis and more. The GIC is widely available, and you can hold it in an RRSP, TFSA, RESP, RDSP, RRIF, or non-registered account. Across the five years, you’re guaranteed a minimum lifetime return of 15% or a 50% maximum.
35% lifetime maximum
$1,000
two-year, three-year, five-year
35% lifetime maximum
$1,000
two-year, three-year, five-year
The RBC North American MarketSmart GIC features a substantial rate of return and market-leading diversification. You’re guaranteed a minimum 18% return across five years that can increase to 35% with the performance of the underlying stocks. This GIC benchmarks 20 blue chip stocks within Canada and the United States. This gives ample potential to reach the maximum return range with a healthy minimum guaranteed return. It’s one of the few options that provides cross-country and cross-sector diversification. Otherwise, the GIC is widely available across account types, and the $1,000 minimum deposit puts it within reach for many investors.
The RBC North American MarketSmart GIC benchmarks 20 blue-chip stocks across Canada and the United States. As a market-linked GIC, your return fluctuates with the underlying companies, including RBC, Bell, Lockheed Martin, Coca-Cola and IBM. This GIC offers diversification across eight sectors and two countries. As usual, you’re guaranteed a minimum and maximum return. You’ll receive at least 18% or a 35% maximum across five years.
Company | Forbes Advisor Rating | Five-Year Return | Minimum Deposit Requirement | Term |
---|---|---|---|---|
TD Canadian Banking & Utilities GIC (Non-registered and TFSA) | 15% lifetime minimum, 50% lifetime maximum | $1,000 | 3-year, 5-year | |
TD Canadian Banks GIC (RSP, RIF, RESP) | 20% lifetime minimum, 35% lifetime maximum | $500 | 3-year, 5-year | |
TD U.S. Top 500 GIC (RRSP, RRIF, RESP) | 12% lifetime minimum, 32% lifetime maximum | $500 | 3-year, 5-year | |
TD Canadian Banking & Utilities GIC (RSP, RIF and RESP) | 15% lifetime minimum, 50% lifetime maximum | $500 | 3-year, 5-year | |
TD Canadian Banks GIC (Non-registered and TFSA) | 20% lifetime minimum, 35% lifetime maximum | $1,000 | 3-year, 5-year | |
TD U.S. Top 500 GIC (Non-registered and TFSA) | 12% lifetime minimum, 32% lifetime maximum | $1,000 | 3-year, 5-year | |
RBC U.S. MarketSmart GIC | 12% lifetime minimum, 30% lifetime maximum | $1,000 | 2-year, 3-year, 5-year | |
RBC Canadian Banking MarketSmart GIC | 19% lifetime minimum, 35% lifetime maximum | $1,000 | 2-year, 3-year, 5-year | |
RBC Canadian Utilities MarketSmart GIC | 15% lifetime minimum, 50% lifetime maximum | $1,000 | 2-year, 3-year, 5-year | |
RBC North American MarketSmart GIC | 18% lifetime minimum, 35% lifetime maximum | $1,000 | 2-year, 3-year, 5-year |
To create this list, Forbes Advisor Canada analyzed 504 guaranteed investment certificates (GICs) across 43 financial institutions, including a mix of traditional brick-and-mortar banks, online banks and credit unions. We ranked each account on nine data points that included annual percentage yield, minimum deposit requirements, (low, medium and high) customer service, compound interest schedule, available terms and availability.
The following is the weighting assigned to each category:
GIC with higher APYs rose to the top of the list. Minimum deposit requirements of $10,000 or higher affected scores negatively. Investments with daily compounding interest schedules were scored higher than those with monthly or quarterly schedules. To appear on this list, the GIC must be nationally available.
A five-year Guaranteed Investment Certificate (GIC) is a low-risk investment. As the name suggests, you’ll deposit your money at a financial institution for five years. In return, you earn interest at a predetermined rate. At the end of the term, you receive your initial investment, known as the principal, along with the interest earned. Early withdrawals generally incur penalties.
There are two main types of five-year GICs: fixed-rate and market-linked. A fixed-rate GIC guarantees a specific interest rate over the five-year term, providing a predictable return. With market-linked GICs, your interest is tied to the performance of a particular stock market index, offering the potential to earn higher returns if the market performs well. In many cases, a market-linked GIC still provides a guaranteed minimum return.
To find the best five-year GIC rates, follow these steps:
1. Research: Research various financial institutions, including banks, credit unions and online providers. You can also leverage platforms like comparison sites to find a consolidated database. However, be aware that some websites may limit options to a handful of partners.
2. Review: Compare the interest rates each institution offers for their five-year GICs. Consider additional factors, such as minimum deposit requirements, compound interest frequency and early withdrawal penalties.
3. Promotional offers: Look for promotions or special offers that could provide higher interest rates for a limited time. You may also have success by negotiating with financial institutions.
4. Read the fine print: Understand the terms and conditions of each GIC before making a decision. Be extra cautious of early termination fees.
Bank/Credit Union | 5-Year | Availability | ||
---|---|---|---|---|
LBC Digital | 4.50% | Nationwide | ||
Simplii Financial | 4.25% | Nationwide | ||
Meridian Credit Union | 4.25% | Ontario | ||
Alterna Bank | 4.15% | Ontario | ||
Canadian Tire Bank | 3.80% | Nationwide | ||
Motusbank | 3.00% | Nationwide | ||
Tangerine Bank | 5.00% | Nationwide | ||
*Rates current as of May 3, 2024. All rates are non-market-linked, non-cashable and non-redeemable. |
Consider shorter-term GICs, such as one-year, three-year or less-than-a-year options. This avoids locking in your money for five years. These GICs offer more flexibility but generally have lower interest rates than five-year GICs. A common strategy is to pursue GIC laddering, which blends the benefits of flexibility and higher interest rates. Short-term GICs are also generally CDIC insured, protecting up to $100,000 per financial institution.
A High-Interest Savings Account (HISA) offers the most withdrawal flexibility. You can withdraw whenever desired, though frequent monthly transactions can incur fees. In exchange, you’ll generally receive a lower interest rate than committing to a GIC. Many HISAs are CDIC-insured, protecting your deposits up to $100,000. However, this availability varies across institutions.
Related: Best High Interest Savings Accounts
Bonds are debt securities. They pay interest installments (coupons) to investors until they mature, at which point the initial sum is returned. Bonds can offer higher returns than GICs but also carry more risk. While a GIC return is somewhat guaranteed, bond returns fluctuate with the Bank of Canada rate.
An interest rate hike will decrease the value of your investment, with a more pronounced effect for bonds with longer maturities. Additionally, you’ll face company-specific risk in the event of default.
Investing in stocks is a popular option for long-term investors. Stocks offer the potential for higher returns compared to GICs but also come with more risk. The value of stocks can be volatile and is not guaranteed. If you invest in the stock market, consider diversifying your portfolio to manage risk. Many market-linked GICs provide stock market exposure with a minimum guaranteed return. However, your upside will be constrained.
Like investing in a GIC, crypto staking involves locking up funds at an institution. You can generally earn more than investing in a GIC, though it takes considerable research to ensure safety. You can stake various crypto assets, though stablecoin is the least risky option.
A stablecoin is a cryptocurrency pegged to an underlying asset, such as the U.S. dollar, gold, or silver. Many options maintain a 1:1 ratio between deposits and reserve assets. For example, a U.S. dollar stablecoin holds 1:1 cash equivalents such as dollars and treasury bills.
It’s a GIC alternative to be aware of. However, it’s crucial to understand the risk. This includes deposit institution risk, protocol risk, regulatory risk and the possibility of the stablecoin peg breaking. It’s essential to thoroughly research and understand the risks before investing in crypto staking.
Featured Partner Offer
1
Tangerine GIC
On Tangerine’s Website
APY:
3.25% to 5.25%
Minimum Deposit Requirement:
Not Specified
Terms:
90 days to 5 years
TD Canadian Banking & Utilities GIC (Non-registered and TFSA) and the TD Canadian Banks GIC (RSP, RIF, RESP) are the top-rated 5-year GICs in Canada. These GICs offer high return ranges, low minimum deposit requirements, diversification across sectors and exposure to stable industries.
TD Bank offers some of the highest 5-year GIC rates in Canada. The TD Canadian Banking & Utilities GIC (Non-registered and TFSA) provides a 15% to 50% return. Meanwhile, the TD Canadian Banks GIC (RSP, RIF, RESP) earns 20% to 35% across five years.
A 5-year GIC can pay 10% to 50% across its lifetime. However, the situation may vary depending on the financial institution and current market conditions.
TD Bank and RBC offer competitive GIC rates with various term and account options. They’re reputable names with a history of solid customer service. Their minimum deposit requirements are within reach for various investors.
Daniel is an expert on travel, finance, and SEO. He grew up in Toronto, receiving an Honours BBA (Finance) from Wilfrid Laurier University. Today, Daniel is based in Lisbon, Portugal, but some of his most adventurous destinations include Cairo, Rio, and Istanbul.