Skip to main content

A feast of 5-per-cent GICs is there for the taking in today’s high rate world.

Heck, your local bank branch probably has a special rate of 5 per cent or more on terms of two years and less. If not, ask for it. But let’s say you want to squeeze every last drop from high rates and maximize your guaranteed investment certificate returns to the max. Where do you go?

First, let’s set some terms of reference. The best GIC rates are in the high 5.5- to 6-per-cent range right now for terms of one through five years. Shorter terms offer the best rates, an oddity that reflects concerns about near-term inflation.

One of the big banks this week offered promotional rates of 5.35 per cent for a one-year GIC and 5.3 per cent for two years, but three, four and five-year terms were at 4.25 per cent.

So, not ideal.

A lot of investors have been using the GIC buying platforms offered by their online brokerages, which typically offer products from many third-party banks in addition to in-house products. Here’s a sampling of top rates from one particular online brokerage this week:

  • One-year: B2B Bank, 5.51 per cent.
  • Two-year: Peoples Trust, 5.55 per cent.
  • Three-year: HomeEquity Bank, 5.36 per cent.
  • Four-year: Home Trust, 5.08 per cent.
  • Five-year: Equitable Bank 5.08 per cent.

You can do better than those rates by purchasing GICs from issuers that deal directly with clients and don’t work with online brokers. For example, the Bank of Nova Scotia-owned online bank Tangerine has been offering a 6-per-cent 18-month GIC lately, Peoples Trust has a 5.8 per cent one-year GIC, and Motive Financial has a five-year GIC at 5.28 per cent.

It’s a next-level hassle to deal with a bunch of different GIC issues, though. For each GIC, you need to monitor maturity dates and ensure the issuer understands where you want your money to go on maturity. Make sure there is no default auto-renew process for any of your GICs – rates will likely be lower at renewal time.

One more option is GIC brokers, which provide top rates and a helping hand in managing your investments. The GIC brokers tracked on recently offered returns 5.66 to 5.9 per cent for terms of one through five years.

The big advantage of buying GICs through an online broker is that you can consolidate them with other investments and manage everything in the same place. Is that worth giving up as much as 0.5 of a per cent in returns? On a $10,000 GIC, 0.5 of a point works out to $50. That seems a fair price to pay for the convenience of having your GICs alongside your other investments.

Your Globe

Build your personal news feed

Follow the author of this article:

Follow topics related to this article:

Check Following for new articles

Interact with The Globe