Finance Calc App

GIC calculator

See what a GIC (guaranteed investment certificate) will be worth at maturity — interest earned and effective annual yield. CDIC-insured, fixed-rate, fixed-term saving.

By Mitch Duncan Last reviewed Methodology

Deposit details

Many GIC products pay interest at maturity or annually. Choosing more frequent compounding raises the effective yield if interest is added to the balance rather than paid out.

Value at maturity
$10,920.25
Interest earned
$920.25
Breakdown
Deposit
$10,000.00
Nominal rate
4.50%
Effective annual yield (APY)
4.50%
Term
2 years
Your CA GIC

Protection: CDIC-insured up to $100,000 per depositor, per member institution.

Tax: Interest is fully taxable as income unless the GIC is held inside a TFSA or RRSP.

Figures assume the rate is fixed for the whole term and interest is left to compound (unless you pick "at maturity"). Early withdrawal usually forfeits some interest or isn't permitted. This is an estimate, not financial advice.

Want the full picture? Dollar-Cost Averaging Explained →

How a GIC works

A Guaranteed Investment Certificate (GIC) is a Canadian savings product that locks a deposit for a fixed term — typically 1 to 5 years — at a guaranteed rate, with your principal fully protected. Deposits are CDIC-insured up to $100,000 per depositor, per member institution.

Maturity value = deposit × (1 + rate ÷ n)^(n × years)

Cashable vs non-redeemable

A non-redeemable GIC can't be cashed early but pays the highest rate. A cashable/redeemable GIC lets you access the money sooner at a lower rate. Interest may be paid annually, at maturity, or compounded — compounding lifts the effective yield above the headline rate.

Tax: register it if you can

GIC interest is fully taxable as income at your marginal rate when held in a non-registered account — there's no preferential treatment like there is for capital gains or dividends. Holding the GIC inside a TFSA (tax-free) or RRSP (tax-deferred) shelters that interest, which can make a big difference over a multi-year term.

What this calculator doesn't cover

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Frequently asked questions

How is a term deposit's maturity value calculated?
Compound the deposit at the fixed rate over the term: maturity = deposit × (1 + rate ÷ n)^(n × years), where n is how often interest compounds per year. If interest is paid out each period instead of added, it's simple interest: deposit × (1 + rate × years). The calculator above does both depending on the compounding option you pick.
What's the difference between the nominal rate and the effective yield?
The nominal rate is the advertised headline rate. The effective annual yield reflects compounding — if interest is added to the balance monthly or quarterly and left there, it earns interest itself, so you end up slightly ahead of the headline rate over a year. If interest is paid out to another account, there's no compounding and the two are equal.
Does compounding frequency change how much I earn?
Only if the interest is left in the deposit to compound. More frequent compounding (monthly vs annually) raises the effective yield a little. But many fixed-term products pay interest out at maturity or to a linked account, in which case the frequency doesn't change your total — you simply receive the simple interest on the principal.
Can I withdraw money before the term ends?
Usually not without a penalty. Most fixed-term deposits either forbid early withdrawal or forfeit a chunk of the interest, and some require notice. Because the money is locked away, keep a separate emergency fund in an easy-access account so you're not forced to break the deposit.
Should I choose a longer or shorter term?
It depends on the rate outlook and when you'll need the money. A longer term protects you if rates fall but locks you out of higher rates if they rise; a shorter term keeps you flexible. Some savers split their cash across several deposits maturing at staggered dates — a 'ladder' — to balance access and return.
Is the interest taxable?
Generally yes — interest is usually treated as taxable income, though the exact rules and any allowances depend on your country and whether the deposit sits inside a tax-sheltered account. The calculator shows the gross maturity value before any tax. Check your local rules or hold the deposit in a tax-advantaged wrapper where available.

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