Business GICs in Canada
Non-Redeemable Business GIC Rates
| Provider | 1-Year | 3-Year | 5-Year |
|---|---|---|---|
5.35% | 5.00% | 4.75% | |
5.20% | 5.00% | 5.00% | |
4.65% | 4.25% | 4.25% | |
4.50% | 4.25% | 4.25% | |
4.50% | 4.00% | 3.95% | |
4.50% | 4.50% | 4.50% | |
4.50% | 4.10% | 4.00% | |
4.00% | 4.00% | 3.95% | |
4.00% | 3.75% | 3.75% |
GIC, which stands for Guaranteed Investment Certificate, is a type of investment available in Canada. While GICs are a popular type of investment for individuals, businesses can also invest in GICs to grow their money in a secure manner. GICs are simple investment products that protect the principal investment and offer guaranteed returns. Businesses can earn predictable returns by investing in a standard fixed-rate business GIC for its full term. Meanwhile, some banks also offer variable-rate and market-linked GICs that have a variable rate of return.
Business GICs are ideal for businesses that want to invest some money for a certain amount of time, with the guarantee of getting their original investment back at the end of the term.
Types of Business GICs Offered by Canadian Banks
| Financial Institution | Non-Redeemable GIC | Cashable GIC | Redeemable GIC | Market-Linked GIC | Variable Rate GICs |
|---|---|---|---|---|---|
| RBC | |||||
| TD | |||||
| Scotiabank | |||||
| BMO | |||||
| CIBC | |||||
| National Bank | |||||
| Desjardins | |||||
| CWB | |||||
| Tangerine | |||||
| Manulife | |||||
| WealthONE |
Business GICs in Canada
RBC offers three categories of business GICs for their business banking clients:
Guaranteed Return GICs: This category of GICs includes Non-Redeemable GICs, Redeemable GICs, Cashable GICs, RateAdvantage GICs, U.S. Dollar Term Deposits and Income Builder GICs. These GICs have a fixed rate of return, which means the returns can be predicted before investing. Based on the type of GIC, businesses can purchase Guaranteed Return GICs for terms from one day to 10 years.
Interest Linked-GICs: This category includes the Prime-Linked Cashable GIC, a GIC with a variable interest rate. The interest rate depends on the RBC’s prime rate and changes with changes in the prime rate. The returns on such GICs increase in a rising rate environment, and businesses have the option to cash out the GIC if interest rates start to drop.
RBC Equity-Linked GICs: Also known as market-linked GICs, the returns of these GICs are associated with the performance of the linked equity investments. Meanwhile, the principal investment remains secure and minimum returns are guaranteed. RBC offers several business GICs tied to the performance of equity indexes in the U.S. and in Canada.
The different types of business GICs offered by TD Bank include:
Special Offer GICs: These are the GICs with ongoing promotional offers. The special offer GICs keep changing from time to time.
Non-Cashable GICs: These are GICs that cannot be redeemed before maturity. The minimum investment amount is $1,000, and the term lengths available are from 30 days to 5 years.
Cashable GICs: TD Bank offers several cashable GIC options, including a short-term cashable GIC option (1 - 29 days), a 1-year cashable GIC option and a 5-year stepper GIC.
Market Growth GICs: Market growth GICs offer returns linked to the stock markets. Such GICs protect your principal investments while offering higher return potential. TD Bank offers several 3-year and 5-year market growth GIC options.
Foreign Currency GICs: TD Bank offers cashable as well as non-cashable options for U.S. Dollar GICs. Term lengths available are 30 days to 5 years.
TD Bank offers the same GIC options to its business banking clients as the personal banking clients. You may have to visit their branch to open a business GIC with TD Bank. You may call the bank at 1-888-568-0951 for more information.
Scotiabank’s business GIC options include:
Non-Redeemable GICs:Scotiabank offers short-term and long-term non-redeemable GICs with term lengths ranging from 30 days to 5 years.
Cashable GICs: These types of GICs are cashable anytime after 30 days of the issue date without any interest penalty.
Redeemable GICs: These GICs can be redeemed at any time, however, predetermined early redemption rates would apply if you redeem early. These rates are lower than the initial GIC rate.
Market-Linked GICs: Market-linked GICs offer returns based on the performance of the index fund they are linked to. Scotiabank offers market-linked GICs linked to Canadian as well as U.S. market indexes.
BMO’s GIC options for their business banking clients are the same as for their personal banking clients. The bank offers a total of 23 GIC options that can be categorized under the following categories:
Cashable GICs: BMO offers GICs that can be cashed at any time without penalty, as well as GICs that can be redeemed anytime at predetermined rates. The MO Cashable RateRiser GIC can be cashed at any time, and the BMO RateRiser Plus GIC is cashable in full on each anniversary. Meanwhile, other cashable GIC options include the BMO Variable Rate GIC, BMO AIR MILES GIC, and the BMO RateOptimizer Plus GIC.
Non-Cashable GICs: The non-cashable GICs can be redeemed only at maturity. The most common type of non-cashable GIC is available for terms from 30 days to 10 years. Meanwhile, other non-cashable options include BMO RateRiser Max GIC, BMO RateOptimizer Max GIC, and BMO Income Generator.
U.S. Dollar GICs: BMO offers three U.S. dollar GICs, which are BMO US$ Term Deposit Receipt, BMO US$ Fixed-Term Deposit, and BMO US$ Redeemable Short-Term Investment.
Market-Linked GICs: The returns of Market-Linked GICs are dependent on the performance of the associated index fund. BMO offers eight market-linked GIC options with 3, 4, 5 and 6-year term lengths.
The different types of CIBC Business GICs are:
Bonus Rate GICs: Non-redeemable GICs with a premium higher rate for selected terms.
Long and Short-Term GICs: Non-redeemable GICs for terms ranging from 30 days to 7 years
Escalating Rate GICs: 3-year and 5-year GICs for which the interest rate increases at each anniversary. Cashable as well as non-redeemable options are available for escalating rate GICs.
EasyBuilder GICs: Uses the laddering investment strategy wherein the initial investment is divided into five portions and invested as 1-year, 2-year, 3-year, 4-year and 5-year GICs. One of the GICs matures each year and is reinvested for five years.
T-Bill Rate GICs: These GICs let you deposit your money for 90 to 100 days at a fixed rate that is higher than the regular 90-day GIC rate. The minimum initial investment required is $25,000.
Flexible GICs: These GICs can be cashed out at any time after 30 days without any penalty.
Variable Rate GICs: GICs with interest rate that varies depending on CIBC’s prime rate.
Redeemable GICs: GICs that can be redeemed at any time at specified early redemption rates.
Business GICs offered by National Bank include:
Non-Redeemable GICs: These GICs cannot be redeemed before maturity. For term lengths up to 1 year, the minimum investment is $5,000; for term lengths of 1 year to 5 years, the minimum investment is $1,000.
Redeemable GICs: These GICs can be cashed out fully or partially at any time. Predetermined early redemption rates will apply if the GIC is redeemed before maturity.
*As of April 2024
The business GIC offered by Desjardins include:
Term Savings: Non-redeemable GICs with term length ranging from 30 days to 10 years (Up to 5 years for online requests). These GICs have a fixed rate of return; thus, you can calculate the exact returns before investing.
Redeemable Term Savings: Fixed-rate GICs that can be cashed at any time without any penalty.
Redeemable Climbing Rate Term Savings: 3-year and 5-year GICs for which the interest rate increases every anniversary. These GICs can be cashed at any time.
U.S. Dollar Term Savings: Non-redeemable U.S. dollar GICs with terms ranging from 1 to 5 years. These GICs require a minimum investment of $5,000.
Regular Income Term Savings: This type of GIC allows you to make one lump sum withdrawal per year without any penalty, under certain conditions. The minimum deposit required is $10,000, and the term lengths range from 1 year to 5 years.
*As of April 2024
The business GIC options offered by Canadian Western Bank (CWB) are:
Business GIC Specials: Limited-time high-interest rate offerings on selected terms. These are non-redeemable GICs.
Fixed Long-Term Business GICs: CWB business banking clients can get long-term for 1-year to 10-year terms. U.S. dollar GICs are also available. The minimum deposit required is $1,000.
Fixed Short-Term Business GICs: Short-term Canadian GICs are available for term lengths from 30 days to 270 days, and U.S. dollar GICs are available for term lengths from 1 day to 270 days. The minimum deposit required is $5,000.
Floating Rate Redeemable GICs: These are cashable GICs whose returns are linked to CWB Canadian prime rate or CWB US dollar prime rate. The term lengths available are 30 days to 3 years.
Tangerine offers non-redeemable GICs for their business banking clients, with terms ranging from 90 days to 5 years. Any other type of GICs are not available. Tangerine accounts do not require any minimum balance and do not charge any fees to save with them.
Manulife Bank’s business GIC offering includes long-term and short-term non-redeemable GICs. The term lengths available are 30 days to 5 years. The minimum investment required for GICs of 30 days to 364 days is $25,000, and for GICs of 1 to 5 years is $2,500.
Just like their personal baking customers, WealthOne Bank of Canada offers non-redeemable GICs to their business banking customers as well. The rates and terms of the GICs are the same as their personal GICs.
How to Purchase Business GICs?
To purchase a business GIC, you must have a business banking account with the financial institution. You may be able to sign up for a business account with a bank if you already have a personal banking account with them, or you may have to visit a bank branch if the bank requires you to do so. You will have to provide the bank with some information about your business, and you might be required to submit some documents.
Once you have a business bank account, you can purchase a business GIC electronically, over the phone, or by visiting a bank branch based on the options offered by your bank.
Deposit Insurance for Business GICs
Similar to personal GIC investments, business GICs are also eligible for deposit insurance. Deposit insurance protects your investment in the event that your bank fails. Federally regulated banks are Canada Deposit Insurance Corporation (CDIC) members. CDIC insures GICs of up to $100,000 per account, including the principal and interest. Meanwhile, deposits at credit unions and other provincially regulated financial institutions are generally covered by the provincial equivalents of the CDIC.