When the Bank of Canada changes its policy interest rate, the rates savers earn tend to move the same way, but not all at once and not by the same amount. This page explains how a decision reaches the main places Canadians keep savings: savings accounts, GICs and bonds. It is the saver’s page of the site’s Canadian interest rate guides; the policy rate itself is on the current Bank of Canada interest rate page, at 2.25% since the decision of October 29, 2025.
How a decision reaches savers
| Savings product | What a policy rate change does | How quickly |
|---|---|---|
| Savings account (including a HISA) | The institution may change its posted rate, by the full amount or less | On the institution’s own timetable, usually days to weeks after the decision |
| New GICs | New GIC rates follow both the policy rate and bond yields for the same term | Often before the decision, as markets price it in |
| Existing GICs | No change: the rate is fixed until the GIC matures | Not affected |
| Bonds and bond funds | Existing bond prices move the opposite way to interest rates | As soon as markets move |
The Bank makes its decisions on eight scheduled dates a year, listed on the Bank of Canada rate announcement schedule, so a savings account rate rarely moves between those dates because of the Bank.
Savings accounts
A savings account’s rate is variable: the institution can change it at any time, and after a policy rate change most do, although not always by the full amount or on the same day. The change applies to the whole balance from the date the new rate takes effect. Current rates at each institution are in the savings account rate table, and the HISA guide explains how the interest is calculated and paid.
On a $50,000 balance, a savings rate that moves by 0.25 percentage points changes the interest earned by about $125 a year, before tax.GICs
A GIC pays the rate it was bought at until it matures, so a GIC bought before a cut keeps its rate and one bought before a hike misses the higher rate until it renews. New GIC rates respond to the policy rate and to bond yields for the same term; because markets price in expected decisions, they can move before the Bank acts. How GICs work is covered in the GIC guide, current rates in GIC rates, the choice between the two products in GIC vs HISA, and spreading money across terms in GIC laddering.
Bonds and bond funds
A bond pays a fixed coupon, so when interest rates rise, existing bonds with lower coupons are worth less and their prices fall; when rates fall, their prices rise. A bond fund or bond ETF holds many bonds, so its value moves the same way. A bond held to maturity still pays its coupons and its face value, but a fund has no maturity date, so a rate rise can leave a loss on the fund’s value. A GIC has no such price changes, which is the main difference between the two for savers.
Rising and falling rate periods
In a falling-rate period, a savings account’s rate tends to come down with each cut, while a GIC bought earlier keeps its rate until it matures. In a rising-rate period the reverse applies: savings account rates tend to rise with each hike, while money in a longer GIC stays at the older rate until maturity. Every policy rate change since 2009 is in the Bank of Canada rate history.
The borrowing side
The same decision moves borrowing costs. Variable-rate mortgages and home equity lines of credit are priced relative to the lender’s prime rate, which usually follows the policy rate; today’s prime is on the Canada prime rate page, and how a decision reaches fixed and variable mortgages is covered in the Bank of Canada policy rate guide.
A $100,000 line of credit at the published prime rate plus 0.50 points (4.95%) costs about $412.50 a month in interest. Credit card rates are set by each card issuer, generally without reference to prime, so a policy rate change does not by itself change them.
Related pages
Sources
The figures and rules on this page come from these sources, last checked against them on October 2, 2026. How we check facts.
- Bank of Canada: Data table
- Bank of Canada: Bank of Canada lowers policy rate to 2ΒΌ%
- Bank of Canada: Policy interest rate