4-Year GIC Rates in Canada
| Provider | Rate |
|---|---|
5.00% | |
WealthONE | 4.85% |
ICICI | 4.75% |
Hubert | 4.60% |
Oaken | 4.60% |
Haventree Bank | 4.59% |
4.55% | |
Peoples Bank | 4.55% |
Equitable | 4.52% |
Manulife | 4.50% |
Laurentian | 4.45% |
LBC Digital | 4.45% |
Outlook Financial | 4.45% |
4.25% | |
4.25% | |
Meridian | 4.25% |
FirstOntario Credit Union | 4.25% |
Canadian Western Bank | 4.20% |
Simplii Financial | *4.17%* |
Sun Life | 4.15% |
Alterna Bank | 4.15% |
Affinity Credit Union | 4.05% |
Bridgewater Bank | 4.01% |
4.00% | |
National Bank | 4.00% |
4.00% | |
ATB Financial | 3.90% |
3.75% | |
motusbank | 3.05% |
Note: GIC rates shown are for non-redeemable GICs with annual compounding.
*Compounded monthly
What Are 4-Year GICs?
One of the lowest-risk investment vehicles in Canada is Guaranteed Investment Certificates (GICs). When you invest in a GIC for a particular term, the investment is locked away for the length of that term. For example, when you invest in a 4-year GIC, your principal investment is locked for a term of 4 years, and you keep earning interest on it during that time. GICs with term lengths of less than 1 year are called short-term GICs, and those with a term length of 1 year or more are categorized as long-term GICs.
Generally speaking, GIC rates increase with the increase in the term length. For example, a 5-year GIC rate is usually higher than a 1-year GIC rate. However, in rare situations, the opposite becomes true, such as what is being observed in January 2024. As of January 2024, the best available GIC rate for a 1-year GIC is 5.50%, but for a 5-year GIC, it is 4.80%. A situation like this is called an inverted yield curve and signifies that interest rates will drop in the future.
Most GICs are eligible for deposit insurance, such as the CDIC (Canadian Deposit Insurance Corporation) insurance. This means that GIC investments within the prescribed limit of the insurer are protected even if the financial institution collapses.
4-Year GIC Rates vs Bond Yields
4-Year GIC Rate 5.00%* as of May 2024 | 4-Year Bond Yield 3.97%** as of January 2024 |
4-Year GIC Rate 5.00%* as of May 2024 | |
4-Year Bond Yield 3.97%** 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)
Historically speaking, 1-year GICs have been outperformed by bonds based on average annual return over the last 40 years. However, in some scenarios, GICs have performed better than bonds in the short term. This was observed in 2022-2023 when the Bank of Canada raised its policy rate from 0.25% to 5.00%. Bond prices move in the opposite direction of the interest rates; therefore, the bond prices fell significantly during this time. On the other hand, GIC rates increased in this period and provided higher returns than bonds.
Types of 4-Year GICs
Non-Redeemable, Redeemable and Cashable GICs
There are three types of GICs based on redemption -
Non-Redeemable GICs: GICs that can’t be cashed out before their maturity date are called non-redeemable GICs.
Redeemable GICs: Redeemable GICs can be cashed at any time at predetermined redemption rates that are much lower than the initial GIC rate. The redemption rates vary depending on when you redeem the GIC.
Cashable GICs: Cashable GICs can also be chased at any time. Cashable GICs typically have an initial waiting period of 30 days. If you redeem the GIC within this time, you will earn no interest. If you redeem any time after the initial waiting period, you will earn interest at the GICs interest rate up to the date of redemption. Cashable GICs usually have a 1-year term, but you can continue to renew the GIC at maturity if you want to invest in a cashable GIC for a longer term, such as 4 years.
Registered and Non-Registered
You can invest in GICs through non-registered accounts as well through a registered account, such as a Tax-Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP), Registered Education Savings Plan (RESP) and First Home Savings Account (FHSA). You can take advantage of the tax breaks that come with registered accounts by investing in GICs through them. GICs usually have better interest rates than even high-interest savings accounts. Therefore, you may consider investing in GICs rather than just holding the money in a savings account if you don’t need access to those funds in the near future.
Best 4-Year GICs in Canada
RBC 4-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 4-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 4-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 4-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 4-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 4-Year GIC Rates
- Minimum Investment: $500
- Eligible for: RRSP and TFSA
Current National Bank Non-Redeemable GIC Rates as of May 17 2024