GIC vs High-Interest Savings Account: Which Is Better?

Both a GIC and a high-interest savings account (HISA) pay interest and are low risk. The difference is how you trade access for rate.

Quick comparison

• Access: a HISA lets you withdraw any time. A regular GIC locks your money for a set term, from 30 days to five years.
• Rate: a HISA rate can change at any time. A GIC fixes the rate for the term, which protects you if rates fall and costs you if they rise.
• Risk: both are covered by CDIC at member institutions, up to $100,000 per category.
• Taxes: interest in either is taxed as income in a regular account. Inside a TFSA, RRSP or FHSA, it is not taxed right away.

Pick a HISA if

You may need the money soon, such as an emergency fund or a down payment you might use within months. The flexibility matters more than a slightly better rate.

Pick a GIC if

You know you will not touch the money for a set time, and you want a guaranteed return. Some GICs are cashable, but those usually pay less.

A middle path

GIC laddering splits your money into several GICs with different terms, for example one, two and three years. As each one matures, you reinvest or use the cash, which gives you regular access without giving up a fixed rate.

Check before you buy

• Is the promotional HISA rate temporary?
• Are there early withdrawal penalties or minimums?
• Is the institution a CDIC member?

Rates change often, so compare the current offers before you decide. This is general information, not financial advice. Share what you chose in the Smart Money Watch community.