Guaranteed Investment Certificates (GICs)
A deposit product with a guaranteed rate of return over a fixed term, not an account type on its own, but something you can hold inside a registered or non-registered account.
What it is
A Guaranteed Investment Certificate (GIC) is a deposit product offered by banks, trust companies, and credit unions. You deposit a sum of money for a fixed term, commonly ranging from 30 days to several years, in exchange for a guaranteed rate of return, paid as interest. Unlike a TFSA, RRSP, or FHSA, a GIC is not itself a registered account. It’s a type of investment that can be held inside a registered account, like a TFSA or RRSP, or in a regular non-registered account, which affects how the interest it earns is taxed. Deposit insurance differs by institution type: see the eligibility section below before assuming CDIC coverage applies.
Eligibility, contributions & withdrawals
There’s no specific eligibility requirement to purchase a GIC beyond being a customer of the issuing institution; minimum deposit amounts and available terms vary by issuer. GICs are typically either cashable (redeemable before maturity, usually at a lower rate) or non-redeemable (locked in for the full term, usually at a higher rate). Deposit insurance depends on the type of institution, not just the product: a GIC at a CDIC member institution (most banks and federally regulated trust companies) is covered by CDIC as described below, while a GIC at a provincially regulated credit union or caisse populaire is instead covered, if at all, by that province’s own deposit insurer, with its own limits and rules, not CDIC. This page doesn’t recommend a specific issuer or rate. Compare current rates, terms, and which deposit insurer actually applies directly with institutions before purchasing.
Tax treatment
How a GIC’s interest is taxed depends entirely on where it’s held. Inside a TFSA, interest earned is never taxed. Inside an RRSP or FHSA, interest is tax-deferred until withdrawal, taxed as income at that time. Held in a non-registered account, GIC interest is fully taxable as income in the year it’s earned or credited, regardless of whether you actually withdraw it. Interest income does not receive the preferential tax treatment that capital gains or Canadian dividends can.
Benefits, risks, and common misunderstandings
A guaranteed rate of return for the full term, regardless of what happens in financial markets.
That guaranteed rate is fixed at purchase. If interest rates rise after you lock in, you’re stuck at the lower rate until the term ends, unless you chose a cashable GIC.
Principal is protected by the issuer’s guarantee and, for eligible deposits at member institutions, by deposit insurance up to applicable limits.
Which deposit insurer applies, and its limit, depends on the institution. CDIC covers eligible deposits at its member institutions (most banks and federally regulated trust companies) up to $100,000 per eligible category (such as individual, joint, RRSP, RRIF, TFSA, FHSA, RESP, or RDSP deposits) per member institution; figures current as of October 2026, confirmed directly at cdic.ca/your-coverage. Credit unions and caisses populaires are provincially regulated and are not CDIC members; their deposits are instead covered, if at all, by the applicable provincial deposit insurer, with its own limits. Amounts above the applicable limit at a single institution are not insured, so large GIC holdings may need to be spread across institutions or categories.
Non-redeemable GICs typically offer a higher rate than cashable ones, rewarding the commitment to leave funds untouched.
Locking funds into a non-redeemable GIC means no access to that money before maturity except in limited circumstances the issuer defines. It isn’t a source of emergency liquidity.
A common misunderstanding corrected: a GIC is not itself a tax-sheltered account like a TFSA.
A GIC is just a deposit product; its tax treatment depends entirely on whether it’s held inside a registered account or a regular non-registered one.
For business owners
A corporation can also hold GICs directly as part of its retained earnings and investment planning. See Retained Earnings & Investment Planning for how corporate GIC interest is taxed differently from personal GIC interest, and how it compares to other options for corporate surplus cash.
Frequently asked questions
Is my GIC protected if the institution fails?
What’s the difference between a cashable and non-redeemable GIC?
Can I hold a GIC in my TFSA or RRSP?
Do GIC rates change after I buy one?
Is a GIC the same as a bond?
Comparing GICs against other places your business’s surplus cash could sit? Book a strategy consultation →