Which bank is best for GICs in Canada? Choosing the Best Bank

GIC (Guaranteed Investment Certificate) for international students or more specifically for students who are coming to Canada is a financial product. It is aimed to provide students with the necessary documents so that they can meet the student visa requirements. Canada’s administration expects all prospective international students to provide evidence of their ability to financially support their stay while undertaking studies in Canada. Often students wonder, “Which bank is best for GIC in Canada?” This MSM Unify blog is here to help you with this question.

If you are seeking a secure investment with a fixed interest rate which is a low-risk investment product then the Guaranteed Investment Certificate (GIC) is suitable for you. They are investment products offered by banks and credit unions in Canada that offer a fixed rate of return over a given period. But when you have many options, how do you identify which bank is best for GICs in Canada?

 

Which bank is best for GICs in Canada: Key factors

Below is a brief look at some of the contenders that are likely to gain a significant market share in the future. Let’s get into it:

Choosing a GIC Provider or GIC Program

When comparing banks for GIC investing, some key factors to consider include:

Interest rates: 

The best thing that you should look at here is which bank is offering the highest interest rate on the term that you want. It is important to note that the prices may also differ a lot from one provider to another.

Flexibility: 

While getting funding from a bank may sound easier, different banks may place certain restrictions regarding the term, minimum investment, and the ability to redeem.

Fees: 

Although not as rampant on GICs as with other products, some banks also have account fees that can reduce your earnings.

Promotional offers: 

Some banks occasionally provide temporary discounts on GIC rates in an effort to woo new customers, so it is wise to look out for such offers.

 

Which bank is best for GICs in Canada: An overview

Here are some of the best options to consider for GIC investing:

Major banks: 

All the major Canadian banks, including RBC, TD, BMO, Scotiabank, and CIBC, have extensive branches, highly developed security systems, and the presence of many choices to provide competitive GIC rates. For this reason, they offer a convenient and rather secure option for a lot of people.

Smaller banks: 

A few niche players, such as EQ Bank, Motusbank, and Oaken Financial, generally aim to beat average GIC rates to capture market share. They offer much more intense competition to the big banking houses.

Credit unions: 

At times, local credit unions can offer even stronger home market competition regarding GIC rates while giving back profits to communities. But it can be lower if it is not located in that region, hence convenience is an important factor.

Online banks:

Wealthsimple Cash, KOHO, and LBC Digital are some of the fully digital online-only banks where a GIC can be managed entirely through digital platforms. However, customer service might be less accessible because of this and the limited number of physical stores might be an issue.

 

Factors to consider for GIC

There are some factors that should be taken into consideration when comparing the offers.

Whenever you come across a promotion of the GIC rate of a certain bank that seems to be very high, you should not just rush in with your money because of the high figure that you see, but ensure that you check the other features that accompany it. Confirm details like:

• Is the rate a limited offer that is only available for now or a normal rate that may be changed later?
• Is the rate fixed only for one or some specific term and not for the other terms?
• Is the offered rate accompanied by a requirement for a minimum balance to be maintained in the account?
• Is there any monthly service fee, per check charge, low balance fee, foreign transaction fee, cash advance fee, or any other account, transaction, or early redemption fee?
• How much can the provider be trusted? Large credit unions give reasonable rates of interest but have lesser chances of being risky.

 

Use GIC comparison sites

Instead of searching the websites of several banks on your own, which can be time-consuming, the GIC comparison website can be helpful. Resource centers such as Ratehub. ca and Greedyrates.ca offer current rates set by banks from across the country and provide you with a place where you can compare the best GIC rates based on term. That way, it is less of a challenge to compare oranges with oranges, given that these sites facilitate such processes.

 

Maximize GIC returns

In addition to shopping around for the best rates, here are a few other tips to maximize GIC returns, take a look:

• For a higher interest rate, one can go for longer terms which may range from up to five years.
• Establish a GIC ladder where you have several but with different maturity periods in a bid to address the two issues.
• Review the rates in each of the plans at maturity, and transfer your money to the new investment if better rates are offered.
• Promotions should be availed but extra vigilance should be observed when reading through the small print.

     

Thus, it can be rather challenging to draw a definite conclusion and name a certain bank as the best to invest in GICs for any given situation. These guidelines provided here will help you with further research and decision-making to select the best option for you. All the best!