Quick Answer
| Feature |
GIC |
Term Deposit |
| Meaning in Canada |
Guaranteed Investment Certificate |
Same product, older term |
| Risk |
None (principal guaranteed) |
None (principal guaranteed) |
| CDIC insured |
✅ Yes |
✅ Yes |
| Interest |
Fixed or variable |
Fixed or variable |
| Terms |
30 days - 10 years |
30 days - 10 years |
Bottom line: In Canada, GIC and term deposit are the same thing.
Understanding the Terms
GIC (Guaranteed Investment Certificate)
| Characteristic |
Details |
| Definition |
Canadian fixed-income product |
| Principal |
Guaranteed return |
| Interest |
Predetermined rate |
| Term |
Set period |
| Issuer |
Banks, credit unions, trust companies |
Term Deposit
| Characteristic |
Details |
| Definition |
Generic term for fixed deposits |
| Usage |
International term |
| In Canada |
Interchangeable with GIC |
| Elsewhere |
Certificate of Deposit (US) |
Types of GICs/Term Deposits
By Redeemability
| Type |
Can Withdraw Early? |
Rate |
| Non-redeemable |
❌ No |
Higher |
| Redeemable |
✅ Yes (lower rate) |
Lower |
| Cashable |
✅ After 30-90 days |
Medium |
By Interest Type
| Type |
How Interest Works |
| Fixed rate |
Same rate entire term |
| Variable rate |
Changes with prime |
| Market-linked |
Tied to market performance |
| Escalating |
Rate increases each year |
By Term Length
| Term |
Typical Use |
| 30-89 days |
Short-term parking |
| 90 days - 1 year |
Emergency fund portion |
| 1-3 years |
Medium-term goals |
| 3-5 years |
Longer savings |
| 5-10 years |
Rate lock strategy |
Current GIC Rates
Sample Rates by Term
| Term |
Rate Range |
| 30 days |
2.00-3.00% |
| 90 days |
3.00-3.75% |
| 1 year |
3.75-4.50% |
| 2 years |
3.50-4.25% |
| 3 years |
3.50-4.00% |
| 5 years |
3.25-3.75% |
Rates vary by institution. Check current rates.
Best GIC Providers
| Provider |
Strength |
| EQ Bank |
Consistently high rates |
| Oaken Financial |
Competitive rates |
| Tangerine |
Promotional rates |
| Credit unions |
Often competitive |
| Big banks |
Lower rates, convenience |
CDIC Insurance
Coverage Limits
| Category |
Limit |
| Deposits in one name |
$100,000 |
| Joint deposits |
$100,000 |
| TFSA |
$100,000 |
| RRSP |
$100,000 |
| RRIF |
$100,000 |
| FHSA |
$100,000 |
What’s Covered
| Covered |
Not Covered |
| GICs (5 years or less) |
GICs over 5 years |
| Term deposits |
Foreign currency deposits |
| Savings accounts |
Stocks, bonds, ETFs |
| Chequing accounts |
Mutual funds |
GIC Strategies
GIC Laddering
| Year |
Amount |
Term |
Rate |
| 1 |
$10,000 |
1 year |
4.25% |
| 2 |
$10,000 |
2 years |
4.00% |
| 3 |
$10,000 |
3 years |
3.90% |
| 4 |
$10,000 |
4 years |
3.80% |
| 5 |
$10,000 |
5 years |
3.75% |
As each matures, reinvest in 5-year term.
When to Lock In
| Rate Environment |
Strategy |
| Rates rising |
Short-term GICs |
| Rates falling |
Lock in longer terms |
| Rates stable |
Ladder approach |
| Rates inverted |
Short-term pays more |
GICs vs Other Options
GIC vs HISA
| Factor |
GIC |
HISA |
| Rate |
Usually higher |
Usually lower |
| Access |
Locked |
Anytime |
| Best for |
Set term goals |
Emergency fund |
GIC vs Bonds
| Factor |
GIC |
Bonds |
| Principal guarantee |
✅ Yes |
❌ Market risk |
| Liquidity |
Low |
Higher (can sell) |
| Return potential |
Fixed |
Variable |
| Complexity |
Simple |
More complex |
Tax Treatment
Non-Registered GICs
| Tax Aspect |
Treatment |
| Interest income |
Fully taxable |
| When taxed |
Annually (even if not received) |
| T5 slip |
Issued by institution |
Registered GICs
| Account |
Tax Treatment |
| TFSA GIC |
Tax-free growth and withdrawal |
| RRSP GIC |
Tax-deferred, taxed on withdrawal |
| RRIF GIC |
Tax-deferred, taxed on withdrawal |
| RESP GIC |
Tax-deferred, EAP taxed to student |
Who Should Use GICs
Good For
| Situation |
Why GIC Works |
| Risk-averse |
Guaranteed principal |
| Known timeline |
Match term to goal |
| Retirees |
Stable income |
| Emergency fund (partial) |
Portion for higher rate |
| Down payment savings |
No market risk |
Not Ideal For
| Situation |
Why Not |
| Need liquidity |
Locked funds |
| Long time horizon |
Inflation risk |
| Growth focus |
Low returns |
| Active investing |
No upside |