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The days of low-hanging fruit for GIC investors are done, at least for now.

This is still a great time for people seeking to invest money with zero risk, forgoing the potential for better returns in both stocks and bonds. But you have to work harder to find the best rates and sift through an increasing number of new products that offer variable rates rather than one fixed rate.

Here are five tips for navigating the GIC market right now:

Five-per-cent yields are still an achievable goal

Roughly half a dozen or so alternative banks still offered 5-per-cent yields as of midweek for terms of one through five years. It is getting harder to find a 5-per-cent return – more than a dozen banks offered this rate several months ago. Forget the big banks – they weren’t doing 5 per cent when I checked this week.

Look to shorter terms for the best rates

Many GIC issuers don’t seem to want to commit to paying clients high rates for five years, so their best deals are for the shorter term. One of the best offers out there as of midweek was a two-year GIC at 5.4 per cent from Peoples Trust, a member of Canada Deposit Insurance Corp.

Online brokers will probably disappoint you

I checked a couple of big brokers at midweek, and the best they could do was 4.9 per cent for one year. Yields declined as terms increased, with a best five-year rate of 4.1 per cent. Five-year corporate bonds with ratings of at least BBB (the minimum for investment grade) still offer yields of 5 per cent or thereabouts.

Be cautious with new GIC products

Big banks have been introducing GICs with variable rates, which offer a way to benefit if interest rates rise from here. If rates fall, you can cash out with no penalty. One bank’s one-year variable-rate GIC had a rate of 4 per cent, less than you can widely get with a conventional one-year GIC. A thought on variable-rate products: banks have gamed out all the possible outcomes and concluded that they will be the winner most of the time with these GICs. That means investors will likely get a second-best outcome compared with choosing a conventional GIC paying a set rate.

Consider high-interest savings exchange-traded funds and mutual funds

These products are designed for parking cash safely in an investment account and can offer yields of 4 to 4.9 per cent on an after-fee basis. You may have to pay brokerage commissions to trade HISA ETFs, whereas the mutual fund version can typically be bought or sold at no cost.

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