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Whether or not the Bank of Canada resumes rate increases this summer, the best days for GIC investors are behind us.

But there are still opportunities to capture rates on guaranteed investment certificates that offer a satisfactory return when you consider a risk level near zero thanks to deposit insurance. Rates of 5 per cent are gone for longer- term guaranteed investment certificates, but a few alternative banks have offered 5 per cent for one year and an even smaller number had 5 per cent for two years. Now, there’s wider availability of 5-per-cent returns for a two-year term.

As of early June, Motive Financial offered 5.1 per cent for two years, Wealth One Bank of Canada offered 5.05 per cent, both EQ Bank and Peoples Trust offered 5 per cent and Oaken Financial offered 4.95 per cent. All four also pay 5 per cent or more on one-year GICs. Why lock down your money for an extra year?

The reason is that the value of guaranteed 5-per-cent returns rises as we contemplate the inevitable shift to lower inflation and interest rates. We’re not there yet, mind you. There’s speculation the Bank of Canada could raise its benchmark overnight rate either this Wednesday or July 12 because of recent signals that inflation is holding its ground and not fading.

Inflation ticked up to 4.4 per cent in April on a year-over-year basis from 4.3 per cent in March. You still get a positive real rate of return from a one- or two-year GIC, and protection from the risks of stocks and even bonds.

Don’t get the wrong idea about GICs in today’s high rate world - they’re not a replacement for stocks as a portfolio pillar unless you’re a very conservative investor. What GICs do is offer security for money you need to keep safe, as well as a way to diversify or even replace bonds in a portfolio.

One good thing to remember about bonds is that they can be bought and sold as required. GICs lock you in, unless you settle for lower returns in exchange for the option to cash out with no penalty. Bonds and bond funds will also rise in price as interest rates fall, just as they fell when rates surged higher in 2022. GICs are inert, neither rising or falling in price according to market conditions.

Investors who buy GICs through an online broker have been able to get 5 per cent rates on one-year terms. On Friday morning, two-year terms at 5 per cent became available at multiple brokers.

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