In Canada, “term deposit” and “GIC” (Guaranteed Investment Certificate) describe the same kind of product: money deposited for a fixed term at an agreed rate, with the principal returned at maturity. “GIC” is the standard Canadian label. “Term deposit” is a more generic one that some institutions still use for particular product lines. This page covers where the labels differ in practice. For how GICs work in general, see the GIC guide; the GIC hub lists every GIC page.
At a glance
| Feature | GIC | Term deposit |
|---|---|---|
| Use of the name | Standard Canadian label | Generic label, used by some institutions for particular products (RBC and TD, for example, for US-dollar deposits) |
| Principal | Returned at maturity | Returned at maturity |
| Rate | Usually fixed; some are variable or market-linked | Usually fixed |
| Typical terms | 30 days to 5 years, sometimes longer | Set by the product, for example RBC’s US-dollar term deposits run from 30 days to 5 years |
| Deposit insurance | CDIC at member institutions; provincial insurer at credit unions | Same |
| Tax | Interest income | Interest income |
In practice: a product called a term deposit at a Canadian institution works like a GIC. The details that matter are in its terms, not its name.
Where the two can differ
Currency and product line. Institutions that sell both may use “term deposit” for one product line (RBC and TD both list US-dollar term deposits alongside their GICs). That is a naming habit, not a rule: the product terms, not the name, set the term length, rate and redemption rules.
Early redemption. Short-term deposits are sometimes cashable after a holding period, and sometimes not cashable at all. Which one you have depends on the product, whatever it’s called. Cashable vs non-redeemable GICs explains the redemption types and what cashing early costs.
Rate structure. Most term deposits pay a fixed rate. GICs come in a wider range, including escalating-rate, variable-rate and market-linked GICs, where the interest depends on a stock index and can be as low as the guaranteed minimum, which is zero on some products.
Business accounts. Corporations can hold GICs and term deposits too, with their own insurance and tax treatment. Business GICs covers the insurance and tax rules for a corporation.
Insurance is the same
CDIC treats a GIC as one type of term deposit, and both are insured at member institutions up to $100,000 per depositor per category, principal and interest combined. At a credit union, both are covered by the provincial insurer. Are GICs safe? sets out the categories and the provincial limits.
Tax is the same
Interest on either is income. In a non-registered account it is taxed at your marginal rate, and for terms longer than a year it has to be reported each year as it accrues. Inside a TFSA it is tax-free; inside an RRSP or RRIF it is taxed on withdrawal. The guide to how GIC interest is taxed covers the accrual rule and T5 slips.
Rates
Short term deposits often pay less than 1- to 5-year GICs, but not always: when the yield curve is flat or inverted, a 90-day deposit can pay as much as a longer one. Posted rates at named institutions are on the best GIC rates page, and the GIC calculator turns any rate and term into dollars.
Term deposit or savings account?
For money that may be needed at any time, the comparison that matters is between a term deposit or GIC and a high-interest savings account. The GIC vs HISA comparison covers that choice, and a GIC ladder is one way to keep part of a larger sum coming due each year.
Related resources
Sources
The figures and rules on this page come from these sources, last checked against them between September 25, 2026 and October 24, 2026. How we check facts.
- cdic.ca: What's covered — CDIC
- Statistics Canada: Financial market statistics, as at Wednesday, Bank of Canada