Guaranteed Investment Certificates (GICs) are some of the best ways to save even though their terms of operations differ. Their terms, types, and interest rates are some of the factors that make it challenging to pick the most-suitable GIC for your financial need.
When it comes to getting GICs in Canada, several financial institutions offer this service, though with different rates. A GIC can be held in a registered TFSA, RRSP, RESP, RRIF, or non-registered accounts. Let’s look at what GICs are and some of Canada’s best credit union GIC rates.
What is a Guaranteed Investment Certificate (GIC)?
A Guaranteed Investment Certificate (GIC) is a type of deposit investment that pays you a specific return rate over a specified duration. They are a significantly valuable and stable investment when it comes to making cautious investment portfolios.
Most people purchase GIC for retirement plans as they provide a low-risk fixed rate of return. GIC is insured and sold by Canadian banks and trust companies.
GICs are identical to a savings account where you put money and are guaranteed a yearly interest percentage by the financial institution. Nonetheless, unlike a conventional savings account, a GIC usually locks-in your cash for the duration stipulated in your contract. This means you cant access funds until it reaches its maturity date.
For example, a 5-year fixed rate non-redeemable GIC cannot be redeemed until five years after. Your issuer will fine you a breaking fee if you revoke your funds before the stipulated years elapses.
Note that some credit unions offer GICss more flexibility and permit you to withdraw your money before maturity. These are known as Redeemable GICs, and their interest rates are lower than what is accessible for a comparable non-redeemable GIC. Although they have similar terms, most GICs have a fixed interest rate.
GICs and HISAs are comparatively safe havens to deposit your cash and get them back when you need It. Your funds will remain intact and earn at least some interest over time. They are great for investors with low-risk tolerance.
How to Buy GICs in Canada
Almost all financial institutions in Canada offer GICs as part of their financial services. You can buy GICs directly from your credit union either by visiting a branch, over the phone, or online. Alternatively, you can buy from GIC Brokers.
Before buying a GIC, ensure to go over the interest rates, terms and conditions. You’ve mentioned some of the best credit union GIC rates above. Note that not all credit unions in Canada provide this service; hence it is only accessible to certain Canadian citizens.
Best Credit Union GIC Rates in Canada
There are several Canadian institutions to choose a GIC from. The GIC you go for depends on your financial needs. When picking a GIC, ensure to read the terms and conditions, the type of GIC, the type of account it will be held, interest rate, etc.
Traditional banks offer GICs; however, their rates are not as exceptional as those provided by credit unions. Bear in mind that all funds in a credit union in Canada are provincially protected; your money is safe. Some of the best credit union GICs rates in Canada include:
1. Hubert Financial GIC
Hubert Financial is regulated by Sunova Credit Union, one of the top 100 credit unions in Canada. Your deposits are insured via Sunova under the Deposit Guarantee Corporation of Manitoba (DGCM). They offer GICs in savings, TFSA, and US$ savings. Their Current GIC rates include:[table “” not found /]
2. Meridian Credit Union
Meridian is an Ontario Credit Union based in St. Catharines with GIC service available in almost all provinces in Canada aside from Quebec. Both registered and non-registered Meridian GICs are insured up to CA$250,000 through Ontario’s Financial Services Regulatory Authority.
One of Meridian’s GIC suite’s distinguishing characteristics is that they offer such a wide variety of GICs to select from, including fixed-rate GICs, Cashable GICs, and principal-guaranteed index-linked GICs. Their interest rates are quite competitive; they include:[table “” not found /]
3. Ideal Savings GIC
Carpathia Credit Union holds ideal Savings; their deposits are insured without limit through Carpathia under DGCM. Their current rates are:[table “” not found /]
4. Motusbank GIC
Motusbank is a digital bank under the Meridien Credit Union. They offer some of the best savings account, GIC, mortgage, and personal loan ratios in Canada. Their current GIC rates are:[table “” not found /]
5. Parama Credit Union GIC
Parama offers cashable and non-cashable GICs with a duration of 1 to 5 years with an average investment of CA$1,000. The dividend is paid yearly and put in a Parama chequing or savings account, making this a considerable alternative for savers who want to leave their primary investment alone and enjoy the income it generates. Below is the current interest rates:[table “” not found /]
6. Implicitly Financial GIC
Implicitly Financial is operated by Entegra Credit Union, with every deposit insured through DGCM. They offer savings and deposit products in regular savings, TFSA, and RRSP accounts. Their current GIC rates are:[table “” not found /]
7. Achieva Financial GIC
Cambrian Credit Union regulates Achieva Financial, and DGCM protects every deposit. It was founded in 1998 and offers savings and security products in RRSP, RRIF, regular savings, and TFSA accounts. Their current GIC rates are:[table “” not found /]
8. Accelerate Financial GIC
Accelerate offers savings and deposit products in non-registered, TFSA, RRSP, and RRIF accounts. They are insured via DGCM, and their current GIC rates include:[table “” not found /]
9. MAXA Financial GICs
MAXA Financial is an online financial institution and a division of Westoba Credit Union Ltd based in Manitoba. They offer exceptional investment rates and are 100% guaranteed by the Deposit Guarantee Corporation of Manitoba.
MAXA offers a consistently high GIC interest rate with plan terms ranging from 1 to 5 years with a minimum deposit of CA$500. All GICs held in MAXA are non-redeemable before the maturity date; this makes it suitable for saving funds you intend to use in the future. Their interest rates are:[table “” not found /]
10. Steinbach Credit Union GIC
Steinback Credit Union (SCU) is one of Canada’s largest credit unions located in Manitoba. Aside from other financial services they provide, they also offer GICs, which can be saved in different accounts – TFSA, RRSP, RESP, RRIF.
All funds with SCU are 100% guaranteed by the Deposit Guarantee Corporation of Manitoba. They have a convenient plan from 1 to 5 years with an average investment of CA$500. All interest accrued from deposited funds overtime is paid annually. It can also be added to the GIC or paid out to your account. Their GIC interest rates are:[table “” not found /]
Choosing the Right Credit Union GIC
When choosing the best credit union GIC terms and type, you must factor in your financial needs and goals. You want to ensure that the GIC matures close to the date you need the funds while still maximizing all perks it comes with.
To choose the right GIC type and term, you must evaluate what you’re saving the money towards and when you’ll need it. Most credit union GIC has a plan that spans from 1 to 5 years. This is to give consumers enough flexibility and options to save their funds.
There are different types of GIC available; it is vital to carefully read the terms and conditions before signing up for one. Most GICs are non-cashable and non-redeemable – this means you cannot withdraw your money until the GIC term is due.
Also, some GICs have affiliations with the stock market while others are basically cash investments. For those linked to the stock market, their interest rates on investments are hard to predict as the stock market is not static; it fluctuates constantly. Thus, if you’re not saving towards retirement or for the long term, you might want to stay off-market-tied GICs.
Choosing the best credit union GICs with great interest rates will help you maximize your financial goals. You can decide to save for a short-term (emergencies) or long-term (retirement), depending on what you are saving towards.
Unlike some unstable investments, GICs are deemed safe and are less risky. Remember to read the terms before investing carefully. Please speak to your financial advisor before making any investments.