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The rising trend for rates on guaranteed investment certificates has abruptly fizzled.

Some fairly good deals are still available, but rates on average have actually fallen lately.

Brandon Brot of GIC Wealth Management says his firm’s best rates on one-year GICs were 0.11 percentage points lower in the second week of January than at the beginning of December, and two-year rates were an average of 0.16 points lower. Yields on terms of 3-to-5 years have also fallen, but to a lesser degree.

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Were you waiting for the rising-rate momentum of the past 18 months to carry GIC rates ever higher? Mr. Brot understands your pain. “I think we’ve come so far so fast, everyone just seems to think that rates will continue to rise and a 4-per-cent, five-year GIC is just around the corner.”

The lesson here is not to sit on the sidelines waiting for higher rates. The economic growth and inflation concerns that drove interest rates higher have, at least for now, abated. A wait-and-see approach may result in you losing out.

For the conservative investor who uses GICs only or mostly, the traditional five-year ladder approach continues to make good sense. Divide your money evenly over terms of one through five years and buy into a new five-year term when a GIC matures. By doing this, you free up money every year to take advantage of higher rates and contain the damage if you have to renew at lower rates.

The best value in GICs continues to be the one-year term, where EQ Bank, Hubert Financial and Oaken Financial were offering 3.1 per cent as of Jan. 11. If you prefer more familiar names, Tangerine and Simplii Financial (owned by Bank of Nova Scotia and Canadian Imperial Bank of Commerce, respectively) were paying 3 per cent. Across GIC-land, the reward for extending the term to five years seems to top out with a return of 3.6 per cent at EQ and Oaken.

The problem with betting on the one-year term is that you could find yourself having to renew at lower rates in 12 months. Mr. Brot’s suggestion for investors, notably seniors, is to use a GIC ladder. “Investing only short term, or sitting on the sidelines waiting for rates to rise, ends up costing them money.”

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