Calculate the maturity value and interest earned on a Guaranteed Investment Certificate (GIC), compounded annually.
Annual compounding (example)
This calculator shows the maturity value and total interest earned on a Guaranteed Investment Certificate (GIC) — a deposit product where you lock in your money for a fixed term in exchange for a guaranteed interest rate, with interest compounding annually.
This calculator compounds your deposit annually at the entered interest rate: each year, interest is calculated on the current balance (including any interest already added in prior years) and added to it. At the end of the term, the total balance is your maturity value.
Formula: Each year, Balance = Balance × (1 + Interest Rate). Maturity Value = Balance after Term years. Total Interest = Maturity Value − Deposit Amount.
Example: A CA$10,000 deposit at a 4% interest rate (example rate — enter your offered rate) over a 1-year term would earn CA$400 in interest, maturing at CA$10,400. Over a 5-year term at the same rate, compounding annually, the same deposit would grow to roughly CA$12,167 — total interest of about CA$2,167. (Note: this example is for illustration purposes only — actual GIC rates vary by institution, term, and amount, and change frequently.)
GICs are one of the most common low-risk savings products in Canada, offered by banks and credit unions, and are typically protected by the Canada Deposit Insurance Corporation (CDIC) for eligible deposits up to CA$100,000 per insured category (or by provincial deposit insurers for credit unions) — making them effectively risk-free up to those limits in terms of capital loss. GICs come in several varieties: non-redeemable GICs lock in your funds for the full term (often with the highest rates), redeemable or cashable GICs allow early withdrawal (usually at a reduced rate), and market-linked GICs tie returns to a market index (with principal protection but variable returns). A common strategy is "GIC laddering" — splitting your money across GICs with staggered maturity dates (e.g., 1, 2, 3, 4, and 5 years) so a portion matures each year, providing periodic access to funds while still benefiting from longer-term rates on the rest. Interest earned on a GIC held in a non-registered account is taxed as income in the year it's earned (even for multi-year GICs, where interest may be taxed annually as it accrues, not just at maturity) — holding a GIC inside a TFSA (see our TFSA Calculator) or RRSP (see our RRSP Calculator) avoids or defers this tax.
Yes, for eligible deposits at member institutions, GICs are typically covered by the Canada Deposit Insurance Corporation (CDIC) up to CA\$100,000 per insured category (such as registered and non-registered accounts being insured separately), or by a provincial deposit insurer for credit unions. This makes GICs effectively risk-free up to these limits in terms of the principal and guaranteed interest.
A non-redeemable GIC locks in your funds for the full term with no early withdrawal (or significant penalties if allowed), typically offering a higher interest rate. A redeemable (or cashable) GIC allows you to withdraw funds before maturity, usually at a reduced interest rate for the period held, offering more flexibility at the cost of a lower guaranteed return.
In a non-registered account, GIC interest is generally taxed as income in the year it accrues - for multi-year GICs, this often means tax is owed annually on accrued interest even though you don't receive the cash until maturity. Holding a GIC inside a TFSA avoids this tax entirely, while holding it inside an RRSP defers tax until withdrawal - see our TFSA Calculator and RRSP Calculator.
A GIC ladder involves splitting your savings across several GICs with staggered terms (e.g., 1, 2, 3, 4, and 5 years), so that a portion matures each year. As each GIC matures, you can access those funds or reinvest at current rates - this provides a balance between the higher rates of longer terms and the liquidity of having funds become available periodically.
It depends on your need for access to funds and current rates for each product. GICs typically offer a guaranteed rate for locking in your money for a set term, which can be higher than a savings account rate, but you generally can't access the funds (or only at a penalty) before maturity. A high-interest savings account offers full liquidity but usually a variable, and sometimes lower, rate. See our Savings Calculator to compare.
No, this calculator compounds annually, which is a common convention for GICs, though some GICs may compound monthly, semi-annually, or pay interest only at maturity depending on the product. Check your specific GIC's terms for its exact compounding frequency, which can cause small differences from this calculator's estimate.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial advice. The interest rate used is an example only and does not represent a rate currently offered by any specific bank or credit union - GIC rates vary by institution, term, deposit amount, and change frequently. This calculator assumes annual compounding, which may differ from your specific GIC's terms, and does not account for taxes on interest earned in non-registered accounts. Always check current rates with your financial institution and consult a qualified financial adviser for personalised advice.