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How to Build a GIC Ladder in Canada (2026): Step by Step, With Current Rates and CDIC Rules
To build a 5-year GIC ladder, split your money into five equal parts and buy 1-, 2-, 3-, 4- and 5-year GICs. Each year, one GIC matures; reinvest it in a new 5-year GIC (or use the cash). After four years, every rung earns the higher 5-year rate and 20% of your money comes due every year. Buy from the highest-rate CDIC- or provincially insured issuer, keep each issuer under the $100,000 per category insurance limit, and hold the ladder in a TFSA if you can, so the interest is tax-free. In recent listings, top rates were roughly 3.5%–3.65% for 1 year and 4.05%–4.25% for 5 years.
What a GIC ladder is
A guaranteed investment certificate (GIC) pays a fixed interest rate for a set term. Longer terms usually pay more, but lock your money up longer.
A GIC ladder solves that trade-off. Instead of putting everything into one 5-year GIC, you spread it across several terms:
| Rung | Term | Matures |
|---|---|---|
| 1 | 1 year | Fall 2027 |
| 2 | 2 years | Fall 2028 |
| 3 | 3 years | Fall 2029 |
| 4 | 4 years | Fall 2030 |
| 5 | 5 years | Fall 2031 |
Each year, one rung matures. You reinvest it in a new 5-year GIC at the end of the ladder. After four years, every rung is a 5-year GIC, earning the higher long-term rate, and one fifth of your money still comes due every year.
Why consider a ladder now
- Rates are still decent. Recent listings showed top 1-year rates around 3.5%–3.65% and 5-year rates around 4.05%–4.25%.
- Inflation is about 3.1%, so money in a 1% savings account is losing purchasing power.
- Rates could go either way. The Bank of Canada may hike this fall, but could cut again if the economy weakens. A ladder means you never bet everything on one rate.
Rates change frequently; check current offers before buying.
Step by step: building a $25,000 ladder
Step 1: Decide the purpose and timeline
GICs fit money you won't need for 1 to 5 years: a home down payment, a planned purchase, part of a retirement income plan, or the safe portion of a portfolio. Keep your emergency fund in something you can access instantly, like a high-interest savings account. See where to keep an emergency fund.
Step 2: Choose the account
| Account | Tax on interest | Good for |
|---|---|---|
| TFSA | None | Most people, if room allows |
| RRSP | Deferred until withdrawal | Retirement money, conservative portion |
| FHSA | None if used for a home | Down payment savings |
| Non-registered | Fully taxed yearly at your marginal rate | Only after registered room is used |
In a regular account, interest is taxed as income every year, even on compound GICs that don't pay out until maturity. That's why registered accounts usually come first.
Step 3: Choose where to buy
- Your bank: convenient, but big-bank rates are often lower.
- Online banks and credit unions (EQ Bank, Oaken, Achieva and others): often the highest rates.
- Discount brokerages (Questrade, Wealthsimple, bank brokerages): sell GICs from many issuers inside one account, which makes it easy to shop rates and spread insurance coverage.
Step 4: Split the money
$25,000 ÷ 5 = $5,000 per rung. Buy one GIC for each term: 1, 2, 3, 4 and 5 years.
Illustrative example (rates are hypothetical, based on recent ranges):
| Term | Amount | Rate | Interest in year 1 |
|---|---|---|---|
| 1 year | $5,000 | 3.60% | $180 |
| 2 years | $5,000 | 3.75% | $188 |
| 3 years | $5,000 | 3.85% | $193 |
| 4 years | $5,000 | 3.95% | $198 |
| 5 years | $5,000 | 4.10% | $205 |
| Total | $25,000 | ~3.85% average | ~$964 |
Step 5: Pick non-redeemable vs cashable
Non-redeemable GICs pay more. Cashable GICs pay less but let you withdraw early. With a ladder, you already have money maturing every year, so most people choose non-redeemable.
Step 6: Set calendar reminders
When a GIC matures, many issuers auto-renew it into the same term at whatever rate they're posting, often not their best. Mark each maturity date and decide in advance: reinvest in a new 5-year GIC, or use the cash.
Stay inside deposit insurance
CDIC covers eligible deposits, including GICs with terms of five years or less, up to $100,000 per depositor, per insured category, per member institution. Separate categories include:
- Deposits in your own name
- Joint deposits
- TFSAs
- RRSPs
- RRIFs
- RESPs, RDSPs and FHSAs
So one person could have $100,000 in a TFSA and $100,000 in an RRSP at the same bank, each fully covered. If your ladder is larger, spread it across issuers. Credit union deposits are covered by provincial insurers, with their own limits.
GIC ladder vs the alternatives
| Option | Rate certainty | Access | Best for |
|---|---|---|---|
| GIC ladder | Locked for each rung | One rung a year | Money needed in 1–5 years |
| HISA / HISA ETF | Changes with rates | Anytime | Emergency fund, short-term cash |
| Short-term bond ETF | Varies; price can fall | Anytime | Liquid fixed income in a portfolio |
| Single 5-year GIC | Locked 5 years | None until maturity | Money you're sure you won't need |
For a deeper comparison, see GIC vs HISA vs cash ETF. The same idea works with bonds: see how to build a bond ladder.
Mistakes to avoid
- Letting GICs auto-renew at a poor rate.
- Ignoring tax in a non-registered account.
- Going over insurance limits at one issuer.
- Locking up your emergency fund in non-redeemable GICs.
- Chasing the top rate from an issuer that isn't CDIC or provincially insured.
The bottom line
A GIC ladder gives you guaranteed returns near long-term rates, with money coming due every year. Split your savings into five rungs, hold them in a TFSA or other registered account if possible, keep each issuer under the insurance limit, and reinvest each maturing rung into a new 5-year GIC.
This article is educational. Rates shown are illustrative ranges from recent listings; confirm current rates and insurance coverage with the issuer.
Frequently asked questions
What is a GIC ladder?
A GIC ladder is a set of GICs with staggered maturity dates, for example 1, 2, 3, 4 and 5 years. Each time one matures, you reinvest it at the longest term. You earn rates closer to long-term GIC rates while still having part of your money available every year.
How much do I need to build a GIC ladder?
Many GICs have a minimum of $500 to $1,000, so a five-rung ladder can start with as little as $2,500 to $5,000. There's no maximum, but you should keep each issuer within CDIC or provincial deposit insurance limits.
Are GICs insured in Canada?
GICs with original terms of five years or less from CDIC member institutions are insured up to $100,000 per depositor, per insured category, per member institution. Categories include accounts in your own name, joint accounts, TFSAs, RRSPs, RRIFs, RESPs, RDSPs and FHSAs. Credit union GICs are covered by provincial deposit insurers, with different limits.
Should I hold a GIC ladder in my TFSA or RRSP?
GIC interest is fully taxable as income in a regular account, taxed at your top marginal rate, so registered accounts are usually better. A TFSA makes the interest tax-free; an RRSP defers the tax. If your TFSA is already full of growth investments, an RRSP or FHSA can also hold GICs.
Is a GIC ladder better than a high-interest savings account?
A ladder locks in rates for years, which helps if rates fall. A high-interest savings account or HISA ETF gives full access and adjusts quickly when rates rise. Many people use a HISA for emergency money and a GIC ladder for money they won't need for one to five years.
Can I cash a GIC early?
Only if it's a cashable or redeemable GIC, which usually pays a lower rate. Most non-redeemable GICs can't be cashed before maturity except in limited cases such as death. That's why a ladder, with money maturing every year, is useful.
Primary sources
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 28, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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