2-Year GIC Rates in Canada
| Provider | Rate |
|---|---|
WealthONE | 5.20% |
Oaken | 5.20% |
Hubert | 5.05% |
LBC Digital | 5.00% |
ICICI | 5.00% |
4.95% | |
Haventree Bank | 4.95% |
Equitable | 4.92% |
Laurentian | 4.90% |
Bridgewater Bank | 4.87% |
Outlook Financial | 4.80% |
Peoples Bank | 4.75% |
Manulife | 4.70% |
4.50% | |
Meridian | 4.50% |
FirstOntario Credit Union | 4.50% |
Sun Life | 4.50% |
Canadian Western Bank | 4.45% |
Alterna Bank | 4.45% |
4.35% | |
National Bank | 4.30% |
Simplii Financial | *4.27%* |
Affinity Credit Union | 4.20% |
ATB Financial | 4.15% |
4.10% | |
4.00% | |
3.75% | |
3.60% | |
motusbank | 3.35% |
Note: GIC rates shown are for non-redeemable GICs with annual compounding.
*Compounded monthly
What Are 2-Year GICs?
Guaranteed Investment Certificates (GICs) are one of the most popular forms of investment in Canada, especially for risk-averse investors. As their name suggests, GICs offer guaranteed returns on investments. When you invest in a GIC, your investment is locked for the length of the term you have selected, and you earn interest on it for that duration. When you invest in a 2-year GIC, your investment is locked for 2 years.
2-year GICs and all GICs with a term length longer than 1 year fall under the category of long-term GICs. Usually, the interest rates increase with the term, meaning a 5-year GIC will often offer a higher interest rate than a 2-year GIC. However, sometimes, the shorter-term rates are higher than the longer-term rates, and this situation is called an inverted yield curve. An inverted yield curve signals that the rates will fall in the future and often also hints at an economic slowdown.
2-Year GIC Rates vs Bond Yields
2-Year GIC Rate 5.20%* as of May 2024 | 2-Year Bond Yield 4.01%** as of January 2024 |
2-Year GIC Rate 5.20%* as of May 2024 | |
2-Year Bond Yield 4.01%** as of January 2024 |
*Highest rate offered by providers listed on WOWA.ca
**From ca.investing.com (End of the day on January 25, 2024)
Both GICs and bonds offer guaranteed returns on investments. Bonds have consistently outperformed GICs in the long term, with a much better average annual return over the last 40 years. However, GICs can outperform bonds in some short-term scenarios, such as when interest rates suddenly increase. A recent example is 2022 - 2023, when the Bank of Canada hiked its policy rates significantly, causing the bond prices to drop sharply. During this time, GIC rates increased and provided higher returns than bonds.
Types of 2-Year GICs
Registered and Non-Registered
Like most other investments, GICs can be held in non-registered accounts as well as registered accounts, such as Tax-Free Savings Accounts (TFSA), Registered Retirement Savings Plans (RRSP), Registered Education Savings Plans (RESP) and more. Investing in GICs through registered accounts can have potential tax benefits. Therefore, if you have a TFSA contribution room or RRSP contribution room available, you may consider investing through these accounts. If you are saving up for the purchase of your first home, you may also consider investing in GICs through a First Home Savings Account (FHSA) to grow your savings tax-free.
Redeemable, Non-Redeemable and Cashable GICs
Another basis for the classification of GICs is their redemption. Non-redeemable GICs are GICs that cannot be redeemed till the date of maturity. Redeemable GICs let you redeem the GIC anytime at a predetermined redemption rate, which is much lower than the original GIC rate. Cashable GICs also have a lower rate than non-redeemable GICs. They can be cashed at that rate anytime after the initial waiting period, which is usually 30 days. Cashing the GICs during the waiting period yields zero interest. Most cashable GICs have a 1-year term, but you can renew the GIC at the end of the first year to invest in it for 2 years.
2-Year GIC Insurance
Most GIC investments are eligible for either CDIC (Canadian Deposit Insurance Corporation) insurance or insurance from provincial regulators. This means that the investments within the insurer's prescribed limits will remain safe even if the financial institution you have invested with fails for some reason.
Best 2-Year GICs in Canada
RBC 2-Year GIC Rates
- Minimum Investment: $1,000
- Eligible for: RRSP, TFSA, RESP, RRIF, LIF, and RDSP (min. $500)
Current RBC Non-Redeemable GIC Rates as of May 17 2024
TD 2-Year GIC Rates
- Minimum Investment: $1,000
- Eligible for: RRSP, TFSA, RESP, and RRIF
Current TD Non-Redeemable GIC Rates as of May 17 2024
Scotiabank 2-Year GIC Rates
- Minimum Investment: $500
- Eligible for: RRSP, RESP, TFSA, RDSP, RIF, LIF, LRIF, and RLIF
Current Scotiabank Non-Redeemable GIC Rates as of May 17 2024
BMO 2-Year GIC Rates
- Minimum Investment: $1,000
- Eligible for: RRSP, TFSA, RESP, RIF, and RDSP
Current BMO Non-Redeemable GIC Rates as of May 17 2024
CIBC 2-Year GIC Rates
- Minimum Investment: $1,000
- Eligible for: RRSP, TFSA, RRIF, and LIF
Current CIBC Non-Redeemable GIC Rates as of May 17 2024
National Bank 2-Year GIC Rates
- Minimum Investment: $500
- Eligible for: RRSP and TFSA
Current National Bank Non-Redeemable GIC Rates as of May 17 2024