What is a GIC, and is it safe?
Quick summary
A GIC (guaranteed investment certificate) is a loan you make to the institution that issues it, for a set period. You get a guaranteed rate for the term and your original investment back at the end. CDIC says a GIC bought through a member institution is eligible for deposit insurance. Your money is typically locked in. Compare it with a regular account in types of savings accounts.
Checked November 10, 2026. Main source: CDIC: Thinking of buying a GIC? Here are five things to know (April 28, 2025, read November 10, 2026). See all 3 sources.
Key facts
- What it is
- A loan to the issuer for a set term
- Source: CDIC, April 28, 2025
- Access to your money
- Typically locked in for the full term
- Source: CDIC, April 28, 2025
- CDIC cover
- Eligible if bought through a member institution, up to $100,000 per category
- Source: CDIC, October 16, 2026
How a GIC works
- You lend money to the issuer for a set period, and the rate is guaranteed for the term.
- At the end you get your original investment back.
- Your money is typically locked in. CDIC's example is $3,000 in a five-year GIC, which stays locked until the five years end.
- Rates can be fixed or variable.
- Interest may be paid monthly, annually or at maturity, depending on the product.
Source: CDIC: Thinking of buying a GIC? Here are five things to know (April 28, 2025, read November 10, 2026).
Where you can buy one and what you can hold it in
You can buy directly from the issuing institution or through a broker or investment advisor. CDIC says GICs can be held in a TFSA, FHSA, RRSP or savings account, and in brokerage accounts.
Source: CDIC: Thinking of buying a GIC? Here are five things to know (April 28, 2025, read November 10, 2026).
Is a GIC safe?
CDIC describes a GIC as low-risk. If it is bought through a CDIC member institution it is eligible for deposit insurance, up to $100,000 per category including principal and interest. CDIC's page does not state a maximum term.
Low risk is not the same as flexible. Because the money is typically locked in, ask the issuer before you buy whether it can be cashed early, and what that costs. We did not find that detail on the CDIC page.
Sources: CDIC: Thinking of buying a GIC? Here are five things to know (April 28, 2025, read November 10, 2026); CDIC: What's covered (modified October 16, 2026, read November 10, 2026).
How GIC interest is taxed
Outside a registered account, GIC interest is income. The CRA says to report the interest earned during each complete investment year, even if you get no slip. Inside a TFSA it is generally tax-free.
Source: Canada Revenue Agency: Line 12100, Interest and other investment income (modified January 20, 2026, read November 10, 2026).
Questions people ask
What does GIC stand for?
Guaranteed investment certificate. CDIC describes it as a loan to the issuing institution for a set period at a guaranteed rate.
Can I take my money out of a GIC early?
CDIC says your money is typically locked in for the full term. Ask the issuer about early redemption before you buy.
Are GICs covered by CDIC?
If you buy through a CDIC member institution, a GIC is eligible, up to $100,000 per category.
Is GIC interest taxable?
Outside a registered account yes, as the CRA describes. Inside a TFSA it is generally tax-free.
Does your province have its own rules?
Credit union deposits are insured by provincial bodies, and the limit depends on where you live. Pick yours to see where to look. We remember your choice on this device only.