How to Build a GIC Ladder in Canada

A GIC ladder spreads savings across several GICs with staggered maturity dates instead of locking everything into one GIC. Part of the money comes due every year, and the ladder earns a blend of short- and long-term rates. This page shows how to build one and when it helps. The GIC hub lists every GIC guide.

How a GIC ladder works

A basic 5-year GIC ladder divides your total savings into five equal portions, each invested in a different term:

When Rung 1 matures in March 2027, you reinvest that $10,000 into a new 5-year GIC (maturing 2032). The following year, Rung 2 matures and you do the same. After the first five years, you always have one GIC maturing annually.

What a ladder does

A blended rate

When longer terms pay more than short ones, a ladder keeps most of the money in longer terms while one rung still matures each year. When the yield curve is flat or inverted, that rate advantage shrinks, and the main benefit is the yearly access.

Regular liquidity

Unlike locking all your money in a 5-year GIC, a ladder gives you access to one-fifth of your savings every year, without the lower rate of a cashable GIC.

Interest rate risk protection

If rates fall, most of your money is already locked in at higher rates. If rates rise, you have money maturing soon that you can reinvest at the new, higher rate. The ladder averages out rate fluctuations over time.

Example with illustrative rates

Using illustrative rates (see best GIC rates for current posted rates):

Total first-year interest on $50,000 ladder: $1,985 (average rate: 3.97%)

If you had put the entire $50,000 into a 1-year GIC at 3.80%, you would earn $1,900. The ladder earns you an extra $85 in the first year, and the advantage grows over time as matured rungs are reinvested at 5-year rates, as long as 5-year rates stay above 1-year rates.

How to build your GIC ladder

Step 1: Decide your total amount

Determine how much money you want to invest in GICs. This should be money you do not need for at least a year.

Step 2: Divide into equal portions

Split your total by five (for a 5-rung ladder). If you have $25,000, each rung is $5,000.

Step 3: Buy five GICs with staggered terms

Purchase a 1-year, 2-year, 3-year, 4-year, and 5-year GIC on the same day.

Step 4: Reinvest at maturity

Each year when a GIC matures, reinvest the principal plus interest into a new 5-year GIC.

Step 5: Repeat

Continue reinvesting each maturing GIC into a 5-year term. Your ladder is now self-sustaining.

Mini ladders and variations

Not everyone needs a 5-year ladder. Here are some alternatives:

• 3-rung ladder (1, 2, 3 years): Better for short-term savings goals with more frequent access
• Short-term ladder (90 days, 6 months, 1 year): For money you may need sooner
• Barbell strategy (1-year and 5-year only): Puts half the money at the 5-year rate while the other half comes due every year

When laddering does not make sense

• The money may be needed within the next 6 months (a HISA keeps it available; see GIC vs HISA)
• Interest rates are rising rapidly (you may want to stay short-term temporarily)
• The amount is too small for rate differences to matter

GIC laddering worked example

Assume $25,000 in a 5-year GIC ladder (illustrative rates; actual rates vary by institution and change often):

After Year 1: Tranche 1 matures, and the $5,200 (principal plus interest) goes into a new 5-year GIC. From then on, one tranche matures every year and is reinvested at the rate on offer at the time.

Why 5 tranches? A 5-tranche ladder captures 1-year through 5-year rates simultaneously. One-fifth of the ladder comes due each year, so part of the money is never more than a year from maturity.

Where to hold the ladder

A ladder works the same in any account; the tax does not. Inside a TFSA the interest is tax-free, and the TFSA’s annual room ($7,000 for 2026) lets a ladder be built up gradually. Inside an RRSP or RRIF the interest is taxed only on withdrawal, and a RRIF ladder can be timed so a rung matures before each year’s minimum withdrawal. In a non-registered account, interest on every rung is taxed each year as it accrues. The guide to how GIC interest is taxed covers the accrual rule.

Frequently asked questions

What is the minimum amount to start a GIC ladder? It depends on the institution’s minimum per GIC, which ranges from none to $1,000 at the institutions on the rates page. With a $1,000 minimum, a five-rung ladder needs at least $5,000. Rate differences between rungs matter more in dollars on larger amounts.

Does reinvesting a maturing GIC in a TFSA use contribution room? No. When a GIC matures inside a TFSA and the money is reinvested in a new GIC in the same TFSA, nothing has been withdrawn, so no room is used. The TFSA hub covers how a GIC inside a TFSA works in more detail.

Is each rung insured? Each rung is a separate deposit, but they add together for CDIC purposes. CDIC protects eligible deposits up to $100,000 per category at each member institution, and eligible deposits in the same category at one institution are combined toward that limit. Are GICs safe? explains how to spread a large ladder.

Compare current GIC rates

Before building your ladder, compare rates across institutions. Small rate differences matter when compounded over multiple years. Check our best GIC rates page for the latest offers, or use our GIC calculator to project your returns.

More from the Savings hub: Savings accounts explained