Start with $10,000. Locked away for a year at the best 1-year GIC rate on our boards, it earns 4.00% (Brunswick Credit Union). Kept liquid at the top of our HISA board, it earns 2.75% (Lighthouse Credit Union). The gap between those two choices, $125 a year, is the number most GIC vs HISA guides never print, and it’s current to our August 26 snapshot.
Whether that $125 buys you anything depends on a single question: do you know when you’ll need the money? The gap itself comes first, in dollars rather than adjectives.
Today’s gap, priced
Both sides of the comparison are priced from our own observations, the same data that ranks our savings board.
| Term | Best GIC on our boards | Big-bank posted average |
|---|---|---|
| 1 year | 4.00% (Brunswick Credit Union) | 2.93% |
| 2 years | 4.25% (Brunswick Credit Union) | 3.06% |
| 3 years | 4.05% (Wealth One Bank of Canada) | 3.12% |
| 4 years | 4.10% (Wealth One Bank of Canada) | 3.23% |
| 5 years | 4.30% (Wealth One Bank of Canada) | 3.35% |
On the savings side, the top of our HISA board sits at 2.75% (Lighthouse Credit Union), with Parama Credit Union next at 2.50%. Our HISA coverage is thinner than our GIC coverage, so read that as the top of our board rather than a verdict on every high-interest savings account in Canada.
Three things fall out of the table:
- The best 1-year GIC out-pays the top of our HISA board by 1.25 percentage points. On $25,000, that’s $312.50 a year.
- The big banks’ posted 1-year average, 2.93%, barely clears the top of our savings board and trails the best 1-year GIC we track by 107 basis points. On $50,000, that trailing costs $535 a year.
- The gap widens with term: 1.25 points at 1 year, 1.55 points at 5 years. Patience is currently on sale in the term aisle.
One mechanical point the comparison guides tend to fumble: a HISA rate is variable and can change with little or no notice, while a non-redeemable GIC’s rate is fixed for the entire term. That fixedness is the whole product. If the savings side is new to you, what a HISA is and how it works is the primer. Side by side:
| HISA | Non-redeemable GIC | |
|---|---|---|
| What it is | A bank account | A deposit contract for a set term |
| Rate | Variable, can change any time | Fixed until maturity |
| Access | Deposit and withdraw freely | Locked until maturity |
| Risk to principal | None at insured institutions | None at insured institutions |
| Coverage | CDIC or provincial, by institution | CDIC or provincial, by institution |
| Suits | Money with no date on it | Money with a date on it |
On coverage: banks that belong to CDIC insure eligible deposits up to $100,000 per depositor, per insured category, while credit unions carry provincial coverage instead unlimited coverage in some provinces. Our deposit insurance guide walks through the categories.
Choosing sides: when a HISA wins and when a GIC pays
Where the liquid side earns its keep
A HISA is the right tool when the withdrawal date is unknown or the balance keeps moving. Emergency funds, money you drip in every payday, cash parked between decisions: all of it wants an account, not a contract. At the top of our board, $10,000 earns $275 a year at 2.75%, and every dollar stays reachable the same day you want it.
Two caveats travel with that number. First, it’s variable, so the rate you open at isn’t a promise. Second, many savings accounts advertise a Promo rate that expires after a few months; the everyday rate underneath is the one that earns for most of the year, and our boards keep Promos labelled separately so the two never blur. We work that honeymoon arithmetic in the open in HISA Promo rates, decoded.
The case for naming a date
When the money has a date on it, the GIC side gets interesting, because you can match the term to the goal and know the outcome to the dollar:
| The goal | Rate on our boards | $10,000 becomes |
|---|---|---|
| Tuition due in 1 year | 4.00% (1-year GIC) | $10,400.00 |
| A trip in 2 years | 4.25% (2-year GIC) | $10,868.06 |
| A down payment in 5 years | 4.30% (5-year GIC) | $12,343.02 |
Maturity values assume annual compounding, using the board rates above.
The three-year version makes the stakes plain. A 3-year GIC at 4.05% turns $10,000 into $11,264.87, guaranteed. The same money in a HISA at 2.75% reaches $10,847.90 only if that variable rate holds for three straight years, which nobody is promising. The gap is $417 — and only one side of it is written into a contract. How long to lock once you’ve picked the GIC side is its own question, one short vs long GIC terms works through.
Which way rates are moving
Direction matters to this choice, and it’s the part no static article can show you. On August 26 alone, our boards logged five brands cutting term rates (Equitable Bank moved 20 rates down, as much as 0.16 percentage points) and three raising them (Wealth One Bank of Canada nudged 8 rates up by as much as 0.15). A lock keeps future cuts out and future raises off; a variable rate does the reverse. Which trade you prefer depends on which direction you’d rather be wrong about.
The middle ground: cashable GICs and the registered lanes
A cashable or redeemable GIC splits the difference: a fixed rate, usually lower than the non-redeemable version, in exchange for the right to leave early. The test for that trade is simple mechanics: if a cashable GIC’s rate doesn’t clear the everyday rate on a good savings account, the savings account offers the same liquidity with fewer conditions. Our boards track redeemability as its own column, and the GIC primer covers the flavours in detail.
The tax lane changes the numbers less than you might expect, with one exception. In the TFSA and RRSP lanes, the 1-year leader matches the non-registered board at 4.00% (Brunswick Credit Union in all three). The FHSA lane runs thinner: its best 1-year rate is 3.45% (Moya Financial) and its best 5-year is 4.00% (Meridian Credit Union). First-home savers can read that lane on its own on the FHSA board; contribution room there is its own subject.
Let the date decide
Three questions settle most cases. When do you need the money? Is the amount fixed? Which lane will hold it? A known date and a settled amount point at a GIC term that matures on that date; no date points at the best everyday, non-Promo savings rate; the lane picks which board you read. Matching the product to the money’s timeline is also where the Financial Consumer Agency of Canada’s investing basics begin. Check the current GIC boards for your term and lane, then set a rate alert so the next move on either side of the gap finds you, instead of waiting for you to re-read a blog post.
Frequently asked questions
Is a GIC better than a high-interest savings account?
For money with a known date, the current answer has a number attached: the best 1-year GIC on our boards pays 4.00% against 2.75% at the top of our HISA board. For money you might need without notice, the comparison isn’t really about rate, because a non-redeemable GIC won’t give the money back early. The date decides, not the product.
Can you lose money in a GIC or a HISA?
Not to market movement: both repay principal plus the stated interest, and deposits at insured institutions are protected within the applicable coverage limits (see the deposit insurance guide linked above). The quieter risk is purchasing power, since a rate below inflation means the balance grows while the groceries it buys shrink.
What happens when my GIC matures?
The principal and interest are paid out, and at many institutions the balance renews automatically into a similar term at whatever rate is posted that day unless you’ve left other instructions. Posted renewal rates are frequently far from the market’s best, so the maturity date is a good day to have the boards open.
Are cashable GICs worth the lower rate?
They’re worth it when their fixed rate beats the everyday savings rate you’d otherwise hold, since you’re getting rate certainty and early exit at once. When the cashable rate falls below a good everyday savings rate, you’re paying for exit rights a savings account gives away free. Compare the two numbers for your amount and term before deciding.
Rates referenced in this article were checked against Ratehunter's data on the publication date shown above and may have changed since — the rate boards always carry the current numbers. See our editorial standards andadvertiser disclosure.