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Understand GICs in 60 seconds

May 30, 2024

Written by Tangerine

Understand GICs in 60 seconds: Video

Got a minute?

We want to tell you about Guaranteed Investments, or GICs, and what makes them such a popular way to make your money grow in Canada.


When you open a GIC, you're essentially lending the bank money for a set period of time. 

At the end of the term, they give you your money back plus interest at a guaranteed rate. 

Choose a short or long term, depending on your needs. 

Generally, the longer the term, the higher your interest rate. 

And with fixed rate GICs, the most common kind, you know exactly how much interest you’ll earn. 

Guaranteed earnings. Sounds like easy money, right?

Just remember: with most GICs, your money is locked away for the entire term. So, if you think you might need your cash sooner, consider a shorter term, or an account where your money is more accessible.

Let’s have a closer look at how it works.

You lock $5,000 into a GIC for a 5-year term. It has a 5 percent annual interest rate. 

At the end of year one, it grows to $5,250. (Assumes no fees, with interest compounding annually.)

At the end of year two, it’s at $5,512.50. 

At the end of five years, you've got $6,381.41.

You walk away one happy customer, principal plus interest in hand.

GIC rates as high as [[GIC.RATE.MAX]]*

Choose a term option to meet your needs

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