Investing in Guaranteed Investment Certificates (GICs) is a popular and low-risk option for many Canadians. GICs offer a fixed rate of return over a specific period, making them a stable and secure investment choice.
GICs are ideal for those seeking to grow their wealth with guaranteed returns and minimal risks. However, GIC rates in Ontario can vary based on several factors, including current market conditions, the length of the investment term, and the financial institution offering the GIC.
In this article, we will explore the best GIC rates in Ontario, providing an overview of the current rates and key factors to consider when choosing a GIC in the province.
Best GIC Rates in Ontario
There are different GIC rates to choose from in Ontario. Some of the top financial institutions in the province offer competitive GIC rates based on the length of the investment term, with longer terms typically offering higher rates of return.
However, it’s important to consider the financial stability and reputation of the institution offering the GIC before investing. The following are the current best GIC rates in Ontario:
1. People’s Trust
People’s Trust is one of Canada’s best GIC rates providers. It is a division of People’s Group, with its Ontario branch situated at 95 Wellington St W Suite 1310, Toronto, ON M5J 2N7.
With over 37 years of experience, People’s Trust offers competitive GIC rates in Ontario with non-registered, tax-free and RRSP GICs.
- 1-year = 5.20%
- 2-year = 4.75%
- 3-year = 4.65%
- 4-year = 4.55%
- 5-year = 4.45%
Learn more about People’s Trust GIC rates
2. ICICI Bank Canada
The ICICI Bank Canada also offers competitive GIC rates in Ontario. They offer competitive rates on redeemable and non-redeemable GICs.
The company is scattered across five locations in Ontario, Don Valley Parkway, Brampton, Downtown Toronto, Scarborough, and Mississauga, and also offers foreign-currency GICs to allow Canadians to invest in other currencies.
They offer a variety of duration options as well as highly competitive rates, so you’re sure to find something to suit your needs, whether you’re looking for a short-term or long-term investment.
- 1-year = 5.35%
- 2-year = 5.00%
- 3-year = 4.75%
- 4-year = 4.75%
- 5-year = 4.75%
Note: These rates are for non-redeemable GICs.
3. Achieva Financial
Achieva Financial is a division of Cambrian Credit Union, a Manitoba Credit union. It is one of Canada’s oldest online financial institutions and offers a range of GIC terms, with all deposits guaranteed by the Deposit Guarantee Corporation of Manitoba.
- 1-year = 5.00%
- 2-year = 4.80%
- 3-year = 4.60%
- 4-year = 4.50%
- 5-year = 4.40%
Learn more about Achieva Financial
4. Oaken Financial
Oaken Financial is a division of Home Trust, which offers competitive GIC rates in Ontario and other parts of Canada. As one of the new online banks in the country, Oaken caters to those looking for low fees and low interest rates on registered and non-registered GIC accounts.
You can earn more from your investment with a $1,000 minimum deposit and CDIC protection than a traditional GIC provider.
- 1-year = 5.35%
- 2-year = 5.20%
- 3-year = 4.80%
- 4-year = 4.60%
- 5-year = 4.50%
Learn more about Oaken Financial GIC rates
5. LBC Digital (Laurentian Bank)
LBC Digital is the online banking division of the Laurentian Bank of Canada. It is headquartered in Toronto, Ontario, and provides some of the most competitive GIC rates in the country.
With a $100 low minimum deposit and CDIC protection, it offers competitive non-registered and non-redeemable GICs in Ontario and other parts of Canada.
- 1-year = 5.00%
- 2-year = 4.90%
- 3-year = 4.65%
- 4-year = 4.45%
- 5-year = 4.50%
Learn more about LBC Digital GIC rates
6. EQ Bank
EQ Bank is powered by Equitable Bank and offers deposits protected by CDIC insurance.
EQ offers much flexibility with its non-registered GICs, and you can start investing with as little as $100.
EQ Bank offers competitive rates, low minimum deposits, zero banking fees, and competitive registered and non-registered GICs with flexible terms and high rates.
- 1-Year = 5.15%
- 2-Year = 4.95%
- 3-Year = 4.75%
- 4-Year = 4.55%
- 5-Year = 4.60%
RELATED: Best GIC Rates in Canada
What is a GIC?
Guaranteed Investment Certificate (GIC) is one of the safe investments with high returns that allows you to lock up your funds for a particular period in exchange for a guaranteed period.
When you buy a GIC, you choose a specific term for which your deposit will remain in the bank and in return, the bank pays you a guaranteed interest rate. GICs are typically low-risk investments, especially those issued by the Canadian Deposit Insurance Corporation (CDIC) members.
GIC rates, fees, and the minimum and maximum amount vary by provider. You can invest in GIC for as little as $500 without any fee associated with buying one. Above all, your GIC rate determines your investment returns.
Pros and Cons of GICs
Like any investment, GICs come with their own set of pros and cons.
Let’s explore some of the advantages and disadvantages of GICs, so you can determine if they suit your financial needs and goals before investing.
Pros
- You earn a guaranteed return on your investment without worrying about market fluctuations.
- A low-risk portfolio helps you avoid surprises
- It allows your investment to grow over time
- Deposit protection by the CDIC
Cons
- Low return compared to other investment accounts
- Not reliable in the case of an emergency
Types of GICs
Here are the major types of guaranteed income certificates (GICs):
- Registered GICs
A registered GIC is a type of GIC with no tax implications. The interest you earn from a registered GIC is tax-free, allowing you to earn more than you would from a fixed-term deposit.
If you have a registered account like a TFSA or RRSP, then this type of GIC is advantageous for earning interest.
Depending on your registered account, how much you can invest in a registered account varies significantly.
- Non-Registered GICs
In contrast to the registered GICs, contributions, interest and withdrawals on non-registered GICs are subject to income taxes. However, non-registered GICs have competitive rates and higher investment limits than registered GICs.
These GICs are not held in the registered account, and GIC interest earned are added to your income tax according to your tax bracket. With a low minimum deposit, you can easily deposit non-registered GIC according to your budget.
- Redeemable GICs
A redeemable GIC is a type of GIC that you can redeem before the investment matures. It is similar to Cashable GICs. This is ideal for funding emergencies while investing.
Depending on the GIC terms, you may be charged early withdrawal fees for redeeming your GIC before maturity. Redeemable GICs are suitable for short-term investment goals as they offer low interest. They are the best option for investors who want the security of a GIC but want to cash out from their investment before it matures.
- Non-Redeemable GICs
With a non-redeemable GIC, you cannot withdraw from your investment until maturity. They offer higher interest rates and are ideal for anyone who wants a secure investment over a fixed period.
Depending on the GIC agreement, you may withdraw from your GIC before maturity, subject to certain penalties.
- Cashable GICs
This is one of the popular types of GICs, suitable for investors looking for short-term gains. You can cash out from a cashable GIC within 30 – 90 days of investing. However, cashable GICs have lower returns compared to regular GICs.
Nevertheless, the liquidity of cashable GICs makes them ideal for funding emergencies while investing.
How are GIC Rates Calculated in Ontario?
GIC rates are calculated based on the GIC type and term. Redeemable GICs usually have low interest rates with high liquidity, making them ideal for investors looking for short-term gains.
However, non-redeemable GICs are the best option for investors with long-term investment objectives looking for high returns.
In the case of a two-year GIC with a 5.40% interest rate, if you invested $200,000, you would get $10,800 every year in interest, and at the end of two years, you will get $21,600 in interest.
Also, knowing how your bank or financial institution calculates the GIC rate is essential because once you sign the contract, you’re subject to the terms and conditions. So, review the payout terms since they determine how much interest you will earn on your overall investment.
Final Thoughts on the Best GIC Rates in Ontario
GICs can be attractive for those seeking a secure and low-risk investment vehicle. With varying rates offered by financial institutions in Ontario, it is essential to do your research and consider factors such as the length of the investment term and the institution’s financial stability before investing.
By taking advantage of the best GIC rates in Ontario, you can maximise your returns and secure your financial future. Whether you’re looking for a short-term or long-term investment, the top financial institutions in Ontario have options to suit your needs.
So, take the time to review your options and choose the best GIC rate that meets your investment goals.
