3 Financial Tips to Get the Best GIC Rates

A GIC, like any financial investment you will make in your life, can be a bit of a gamble. Although the rates for GICs may seem low in comparison to stocks, for example, GICs offer a more solid return on investment than the latter. The constantly fluctuating stock market rates make stocks unpredictable. When you’re investing your hard-earned savings, you want to have solid reassurance about your ROI. Luckily, reassurance is what GICs can readily offer you as low-risk investments.

Although GIC rates in recent years are much lower than they used to be, it’s still quite within your reach to achieve a generous investment rate. The key is learning about the right tips for achieving the best GIC rates available. Curious about what these tips are? Read on to find out.

1. Don’t Choose Traditional GIC Options

It’s understandable that your gut instinct would lead you toward a mainstream GIC option, such as a Canada Savings Bond (CSB). After all, you’re looking to make the safest bet with your investment, that’s why you chose a guaranteed investment in the first place! A CSB, however, has perhaps the lowest rate of all your options, offering only 0.50 per cent annually for your last issue.

Many of Canada’s big banks offer relatively higher rates, with the most generous running somewhere between 1.25 and 2.00 percent annually, for a 1-year GIC. Most 1-year GIC rates are much lower, however, with the lowest being CIBC’s 0.55 per cent, only marginally higher than the current annual rate for a CSB.

2. Find a Deposit Broker

Many potential GIC investors are unaware that just as there are mortgage brokers who specialize in shopping for the lowest mortgage rates, there deposit brokers who can shop for the highest GIC rates. What’s even better is that deposit brokers will provide this service to investors for free—they are paid by the financial institutions.

Deposit brokers claim that they can beat posted rates by the big banks by a full percentage point. There’s a caveat for this financial feat that’s similar to traditional GIC options though. The amount a deposit broker can shop for you is still dependent on the institutions they access and your preferred term of GIC.

So, the matter is still rather dicey despite a broker increasing your chances to find the best GIC rate. A deposit broker will help you find a better ballpark, but it’s still up to you to decide if it truly is the best rate for your investment.

3. Make a Secure Investment with a Trusted E-Bank

Going online might seem a bit unorthodox at the outset but hear us out. What you need to do is make your GIC investment with an e-bank that has a great reputation. E-banking institutions, like Omnia Direct, pride themselves on prioritizing customer service and ensuring you have the tools to compare their GIC rates with Canada’s big banks. Not to mention, you can do this even before you get into an investment deal!

The most important thing to keep in mind when choosing an e-bank as your GIC option is that many big banks post rates that are lower than smaller institutions. Those lower rates are also subject to daily fluctuations, meaning that it’s in your best interest to shoot for the highest GIC rate possible. A five-year GIC annual rate for Omnia Direct is 2.87 per cent. Quite the difference, wouldn’t you say?

E-banking has changed a lot since its advent; institutions like Omnia Direct are a division of a reputable credit union, the WFCU. Since the WFCU is a member of the Deposit Insurance Corporation of Ontario (DICO), all your GIC investments are insured.

Finding the best GIC rate is about properly surveying your options, and with these tips, you’re ahead of the game.