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A big bank has reached the 5 per cent mark on GICs, a welcome development for people who shy away from dealing with online alternatives.

If you’re open to using an alternative bank that operates online, yields as high as 5.3 per cent on guaranteed investment certificates are available. But Canadians are loyal to big banks – you can see this in the difficulties that online competitors have in establishing themselves as a market force. EQ Bank has done it, but few others.

We have a highly competitive market for GICs right now, so much so that big banks have been pushing their rates to new highs. Bank of Nova Scotia offered a featured rate of 5 per cent rate on two- and three-year GICs as of late this week. Canadian Imperial Bank of Commerce had a promotional rate of 5 per cent for two years. Laurentian Bank of Canada, with branches mainly in Quebec, offered 5.25 per cent for two years and 5 per cent for five, seven and 10 years.

Other banks approached 5 per cent this week, but couldn’t quite find the competitive energy to hit that threshold. Royal Bank of Canada had a special rate of 4.85 per cent for five years and 4.75 per cent for two years. If you’re nervous about locking up money, there was a 3 per cent cashable one-year GIC on offer.

These rates are available directly to the public, often online as well as through branches. If you invest through an online broker, 5 per cent rates from big banks and their mortgage and trust company divisions have been available for a while on an off-and-on basis. You’ll find your broker’s GIC order platform listed under fixed income trading.

Big banks have an aura of safety around them that comes from their size, their branch networks and marketing presence. But banks of all sizes are part of Canada Deposit Insurance Corp., which insures eligible accounts for up to $100,000 in combined principal and interest.

A realist’s take on big banks is that they offer less risk than an online alternative bank, where you might have to depend on CDIC to get your money back in case of insolvency.

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