How to use the GIC calculator
- 1 Enter the deposit.
- 2 Enter the interest rate and term.
- 3 Choose compounded or simple interest.
- 4 Choose the account type and your income.
Worked example
$25,000 in a 3-year GIC at 3.5% compounded yearly, in a taxable account with $70,000 of other income in Ontario. The GIC grows to about $27,718, earning $2,718 of interest. About $806 of that goes to tax.
GIC tips
- Deposit insurance: CDIC covers eligible GICs up to $100,000 per category at each member institution; credit unions have provincial coverage.
- Redeemable or not: non-redeemable GICs pay more but lock your money; redeemable ones can be cashed early for a lower rate.
- Ladder: splitting money across 1 to 5-year GICs gives regular access and smooths rate changes.
- Tax: interest is fully taxable each year outside registered accounts, even if paid at maturity.
Hold GICs tax-free with room from the TFSA Room Calculator, or inside an RRSP.
Features
Compound or simple
Compounded yearly, monthly or paid out.
After-tax return
Tax on interest outside a TFSA.
Any term
One to five years.
When to use it
Rate shopping
Compare banks and credit unions. Hold it tax-free; see the TFSA Room Calculator.
TFSA or not
See the value of holding GICs in a TFSA. Hold it in an RRSP; see the RRSP Calculator.
GIC ladders
Plan a ladder of terms. Saving for school? Use the RESP Calculator.
Short-term goals
Save safely for a planned expense. See tax on interest with the Income Tax Calculator.
Related Savings and Investing tasks
Frequently asked questions
What is a GIC?
A guaranteed investment certificate pays a fixed rate for a set term, with your deposit guaranteed.
Is a GIC insured?
GICs at CDIC member institutions are covered up to $100,000 per category, for terms of five years or less.
How is GIC interest taxed?
Outside registered accounts it is taxed as income every year, even if paid at maturity.
Can I cash a GIC early?
Non-redeemable GICs cannot be cashed early. Cashable GICs allow it but pay lower rates.
Is a GIC better in a TFSA?
Yes. Interest in a TFSA is tax-free.
What is a GIC ladder?
Splitting money across terms from 1 to 5 years, so part matures every year.
Are GIC rates fixed?
Yes. Most GICs pay a fixed rate for the whole term. Market-linked GICs pay a return linked to an index instead.
Do credit unions offer better rates?
Often. Credit union deposits are covered by provincial deposit insurance, which in some provinces has no limit.
What happens at maturity?
Many GICs renew automatically for the same term at the current rate unless you give other instructions.
Can I hold a GIC in an RRSP?
Yes. GICs can be held in RRSPs, TFSAs, FHSAs and RRIFs.
What is a high-interest savings alternative?
A high-interest savings account pays a variable rate but lets you withdraw any time.
What is the difference between compound and simple interest?
Compound interest is added to the deposit and earns more interest, while simple interest is paid out, so the deposit stays the same.
Should I lock in a long term?
Longer terms usually pay more, but your money is tied up. A ladder balances rate and access.
Is GIC interest taxed in an RRSP?
No. It grows tax-deferred and is taxed only when withdrawn.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Built and reviewed by Hamza Farooq, founder and lead developer
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