GIC & HISA Interest Calculator

GICs and HISAs in Canada — 2025 Guide

Guaranteed Investment Certificates (GICs) and High-Interest Savings Accounts (HISAs) are Canada's most popular low-risk savings tools. With interest rates at multi-decade highs, Canadians have been moving billions into these products — but understanding how compounding works and where to hold them can significantly impact your returns.

GIC vs HISA — Which is Better?

GICs typically offer higher rates than HISAs in exchange for locking in your money for a fixed term (1–5 years). Non-redeemable GICs cannot be accessed early without penalty. HISAs offer full liquidity — you can withdraw anytime — but rates fluctuate with the Bank of Canada rate and are generally lower than GICs.

Compounding Frequency Matters

Daily compounding produces slightly more interest than annual compounding at the same stated rate. The "effective annual rate" (EAR) shows the true annual return after accounting for compounding frequency. A 4.5% rate compounded daily has an EAR of 4.603% — meaningfully higher over longer periods.

Where to Hold GICs and HISAs

Interest income is taxed at your full marginal rate — the least tax-efficient form of investment income. Holding GICs and HISAs inside a TFSA or RRSP shelters this interest entirely. If you have available TFSA room, always prioritize holding interest-bearing investments there before non-registered accounts.

CDIC Insurance

GICs and savings deposits at CDIC member institutions are insured up to $100,000 per depositor per category (e.g., $100k in TFSA, $100k in RRSP, $100k in non-registered). Credit union deposits are covered by provincial deposit insurance — typically unlimited in provinces like BC, MB, and ON.

Rates shown are approximate as of early 2025 and change frequently. Always check current rates directly with your financial institution. Calculations assume rates remain constant for the full term. Not financial advice.