Banking
Cashable vs Non-Redeemable GICs in Canada
A non-redeemable GIC locks your money for the term at a set rate — the best 1-year rate we track is 3.75% at Oaken Financial. A cashable GIC lets you withdraw early, but usually pays less for that access.
What is the difference between a cashable and a non-redeemable GIC?
A non-redeemable GIC holds your money until maturity at a guaranteed rate. A cashable or redeemable GIC allows early withdrawal, usually after a minimum holding period and with a penalty or a reduced rate.
WalletReturn tracks non-redeemable GIC rates from 8 providers, because those are the rates the providers publish in a comparable form. Cashable terms vary more between institutions, so check the issuer’s own terms before assuming you can withdraw without cost.
Both are deposits: at a CDIC member they are covered up to $100,000 per category, per institution, and both are covered by provincial deposit insurers at credit unions.
Put it into practiceBest GIC rates in CanadaWhat are the best non-redeemable GIC rates right now?
1-year: 3.75% (Oaken Financial); 2-year: 4.20% (Oaken Financial); 3-year: 4.30% (Oaken Financial); 4-year: 4.35% (Oaken Financial); 5-year: 4.50% (Oaken Financial).
| Term | Best rate | Provider | Interest on $10,000 |
|---|---|---|---|
| Top1-year GIC | 3.75% | Oaken Financial | $375 |
| 2-year GIC | 4.20% | Oaken Financial | $858 |
| 3-year GIC | 4.30% | Oaken Financial | $1,346 |
| 4-year GIC | 4.35% | Oaken Financial | $1,857 |
| 5-year GIC | 4.50% | Oaken Financial | $2,462 |
Interest is calculated on the full term at the stated rate. Locking in for longer usually pays more, but it also means you cannot move that money if rates rise, or if you need it.
What does withdrawing from a GIC early cost?
With a non-redeemable GIC you generally cannot withdraw before maturity at all, or you lose the interest you have earned so far. With a cashable GIC the penalty is usually a set number of months of interest.
Because the penalty is set by the issuer, the same term can mean different costs at different institutions. Read the terms for the minimum holding period, the penalty formula and whether the penalty can touch your principal.
A cashable GIC usually pays less than its non-redeemable counterpart at the same institution — that lower rate is the price of being able to leave.
Should I choose a cashable or a non-redeemable GIC?
Choose non-redeemable for money you can leave untouched for the full term, and compare it with the best ongoing savings rate of 2.80% at Oaken Savings Account before you commit.
A 1-year non-redeemable GIC at 3.75% earns $375 on $10,000, against $280 in the best ongoing savings account. The GIC wins on interest; the savings account wins on access.
Keep your emergency fund in savings, and use GICs for money with a date attached to it — a tax instalment, a planned purchase, or a rung in a ladder.
Are both types of GIC insured?
Yes, when the issuer is a CDIC member or a provincial credit union deposit insurer. Coverage is per depositor, per institution, per category, up to $100,000.
Deposit insurance covers the deposit, not the rate: it does not protect you from choosing a rate that turns out to have been too low. Split deposits across institutions if a single balance would exceed the coverage limit.
Keep reading
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BankingHow to Waive Chequing Account Fees in CanadaMost of the big-bank chequing accounts we track charge $16.95 to $30.95 a month and waive it if you keep a set balance — $4,000 on the mid-tier plans, $6,000 on the premium ones.- BankingHow Much Interest $10,000 Earns in a Savings Account in CanadaWhat $10,000 earns in one year at 15 Canadian savings accounts, with welcome rates and ongoing rates combined. Best ongoing rate: Oaken Savings Account at 2.80%.
- BankingBest TFSA Savings Accounts and GIC Rates in CanadaWhere to keep cash in a TFSA: the best savings and GIC rates we track (2.80% savings, 3.75% for a 1-year GIC), how much your TFSA would earn, and what to check before you open one.
Official sources and further reading
Terms vary by product. Confirm the provider’s current terms before acting. This guide does not predict approval, realized value or credit-score changes. How WalletReturn calculates value