What is a GIC?

A Guaranteed Investment Certificate is a deposit product where you agree to leave a lump sum with a bank or credit union for a fixed term, in exchange for a guaranteed interest rate. Terms commonly range from 30 days to five years. Because you are committing your money for a set period, GICs generally pay more than a regular savings account, and longer terms usually pay more than shorter ones.

The trade-off is access. With a standard non-redeemable GIC, your money is locked until the term ends. If you withdraw early you may forfeit interest or pay a penalty. Cashable and redeemable GICs solve this by letting you access funds early, but they typically pay a lower rate in return. For a real-world example of posted and promotional rates, see CIBC’s current GIC rates.

What is a HISA (high-interest savings account)?

A high-interest savings account is a savings account that pays a higher interest rate than a typical chequing or basic savings account, while still letting you deposit and withdraw whenever you want. There is no term commitment and usually no minimum balance. Online banks and credit unions tend to offer the most competitive HISA rates because they have lower overhead than big-bank branches.

The catch is that a HISA rate is variable. The bank can raise or lower it at any time, often in response to changes in the Bank of Canada policy rate. That flexibility is exactly why a HISA suits money you might need on short notice. You can compare current Canadian HISA rates to see what the market is paying right now.

GIC vs HISA: the key differences

When you weigh a GIC vs HISA, three differences matter most: how easily you can access your money, how the interest rate behaves, and how each fits a specific savings goal.

1. Liquidity (access to your cash)

This is the biggest difference. A HISA gives you full access at any time, so it is ideal for an emergency fund or money earmarked for a near-term purchase. A non-redeemable GIC locks your funds for the term, which removes the temptation to spend but also means the money is unavailable in a pinch.

2. Interest rate and rate certainty

A GIC locks in your rate for the entire term, so you know exactly what you will earn regardless of what happens to interest rates. A HISA rate floats, which helps you when rates rise but works against you when they fall. In a falling-rate environment, locking a GIC can protect your return; in a rising-rate environment, a HISA lets you capture increases automatically.

3. Safety and deposit insurance

Both GICs and HISAs are low-risk deposit products, and both are eligible for deposit insurance through the Canada Deposit Insurance Corporation (CDIC) when held at a member institution, up to the coverage limit per category. You can confirm coverage details and limits at the CDIC website. Provincial credit unions are covered by separate provincial insurers. Neither product exposes your principal to market risk the way stocks or bonds can.

When a GIC is the better choice

• You have a lump sum you will not need for a defined period (for example, a down payment in two years).
• You want a guaranteed, predictable return and rate certainty.
• You expect interest rates to fall and want to lock in today’s rate.
• You want to remove the temptation to dip into the money.

When a HISA is the better choice

• You are building or holding an emergency fund that must stay accessible.
• You may need the money within the next several months.
• You want to keep earning interest while you decide what to do with the cash.
• You expect interest rates to rise and want your rate to follow.

A quick GIC vs HISA example

Imagine you have $10,000 you will not need for one year. Suppose a one-year GIC pays 4.0% and a HISA pays 3.5%. In the GIC, you earn a guaranteed $400, but the money is locked for the full year. In the HISA, you earn roughly $350 if the rate holds, the rate could move up or down, and you can withdraw at any time.

The roughly $50 difference is what you are paid to give up access for a year. If there is any real chance you will need the cash, the flexibility of the HISA is usually worth more than the extra interest. If the money is genuinely set aside, the GIC wins on return and rate certainty. These figures are illustrative only; actual rates change frequently, so always check current offers before deciding.

How GIC and HISA interest is taxed

Interest from both GICs and HISAs is treated as ordinary income, so in a non-registered account it is taxed at your full marginal tax rate, unlike capital gains or eligible dividends, which are taxed more favourably. This makes the account you hold the product in matter as much as the rate itself.

Holding a GIC or HISA inside a Tax-Free Savings Account (TFSA) means the interest is never taxed, while inside a Registered Retirement Savings Plan (RRSP) the tax is deferred until you withdraw. For interest-heavy products like these, using registered room first is often the most tax-efficient choice. Our TFSA or RRSP guide explains how to prioritise between the two.

Can you use both? GIC and HISA together

For most savers the answer is not GIC vs HISA but GIC and HISA. A common approach is to keep three to six months of expenses in a HISA for emergencies, then place money you will not need for one to five years into GICs for the higher locked-in rate.

A GIC ladder takes this further: instead of putting everything into one five-year GIC, you split it across one-, two-, three-, four-, and five-year terms. Each year one GIC matures, giving you regular access to a portion of your money while the rest keeps earning longer-term rates. You can also hold both GICs and HISAs inside registered accounts to shelter the interest from tax. See our guide on whether to use a TFSA or RRSP to decide which account fits.

Frequently asked questions

Last updated: June 2026