buy giCs

Make sure you know what you’re buying

Contact the provider / distributor online or by phone to check these details:

​1. How is interest calculated and paid out?

  • Some GICs pay simple interest monthly, semi-annually, quarterly or annually. Others compound interest annually and pay out at maturity. You may have a choice between some alternatives
  • Compounding interest and getting it paid out together with the principal repayment at maturity is the most effective option

2. What is the minimum amount?

3. How can you leave instructions at the time of purchase for what the provider / distributor
    should do with the money at maturity?

  • Banks, and traditional banks in particular, like to roll over (renew) maturing GICs. This may not be what you want. Rolling over means reinvesting the money into a similar-maturity GIC at the current interest rate
  • Sometimes the roll-over is automatic when you buy a GIC online at a bank, and you’ll have to call the bank to leave instructions to cash the GIC instead
  • Other providers take online instructions to deposit cash to your account at maturity, or do it automatically

4. Will the bank send you a notice of upcoming maturity?

  • It’s convenient to get a reminder so that you can get ready to either reinvest the money or withdraw to use it

5. Will the bank send a confirmation of the transaction – by email, text, or regular mail?

6. Is there any fee / commission?

  • Assume there is unless you are buying the GIC directly from the provider (that is, the bank that issues it).  It will be incorporated in the GIC interest rate. You can see that by comparing the rates shown on, for example, the www.ratehub, which are provider rates and the rates for the same GICs shown, for example, by your online bank or online broker platform. It could be 0.15%-0.25% of the annual rate

7. Confirm what institution insures the GIC

  • Expect CDIC, a federal (Canadian) government agency, for banks and trusts that are federally-incorporated, and a provincial government agency for the regional banks and credit unions. From a practical perspective, we would not worry about the difference – all are government agencies

8. Is the GIC redeemable or non-redeemable?

  • Non-redeemable GICs offer a higher rate but your money will not be available to you until maturity. Or there may be a penalty if you redeem early.  So consider non-redeemable GICs. And if you think you’ll need the money sooner, consider a ladder of GICs or simply keeping the money in a savings account​​

before you buy a gic

Do your research to identify the most competitive offers in the maturity that interests you

  • Make sure to look at the highest-rate providers not just in one maturity but across the range from 1 to 5 years, as in our research table. Sometimes providers do not offer competitive rates in a specific maturity and you’ll be better off avoiding it and buying either a slightly shorter or a slightly longer GIC
  • Include in your research those banks where you already have accounts. If you have an online broker investment account, check also which GICs at what rates they offer. See next point for reasons

Decide where you want to buy the GIC. You will need an account with the GIC provider / distributor in order to be able to complete the purchase

  • If the bank or online broker whose customer you already are offers a reasonably competitive GIC rate, it’s the most efficient way to buy it
  • Sometimes it’s worth the trade-off between a slightly lower interest rate and not having to fuss with the opening of another account with a smaller institution or deposit broker
  • If you decide to open a GIC-related account with another institution or deposit broker, review the steps to OPEN a savings account and OPEN an online chequing account. Make sure you also review how to KEEP UP with your account so that you can link the GIC account with your chequing account to be able to transfer money

Determine what account you're opening: a registered (TFSA or RRSP) or taxable account.

  • ​Any savings and investment account can be opened as a registered or taxable account.

It is likely that when you're starting out you should be opening a TSFA account - because you have ample TFSA contribution room

  • ​When you only use a TSFA account, you don't need to worry about taxation at all​​.

making the purchase

Assuming that you already have an accountwith the provider of the GIC you want to purchase, you can complete the purchase online.

Make sure the money for the purchase is in the account that you will use to purchase the GIC or a ladder of GICs.

ill out an online application:

  • The usually required personal details should autofill once you login with your customer number
  • If you are buying the GIC from a distributor (like in your online broker investment account), rather than directly from the issuer (like the issuing bank), you will need to select the issuer of the GIC
  • You will then choose the maturity, the frequency with which interest will be paid and whether it will be simple or compounded, and the type of GIC (redeemable or not)
  • Make sure to provide instructions to the bank what to do with your money when the GIC matures. If you don’t, the bank will most likely roll it over to a similar GIC (and you usually have 10 days to contact a bank a cancel a new GIC if you don’t want to renew it)
  • You will have to answer some questions about who will be using the proceeds from the maturing GIC and for what purpose.  Those are related to the bank’s anti-money-laundering activities.
  • You will also be asked to acknowledge the terms and conditions of the transaction, and confirm whether you want to receive information electronically or on paper. 


Until it matures, the GIC you have just purchasedwill be showing as a position (line) in your account or as a separate GIC account, depending on how your bank is organized. You should also get a confirmation of the transaction by email, in the usual way your bank operates.