You have savings sitting idle. Three main options compete for it: High-Interest Savings Accounts (HISAs), Guaranteed Investment Certificates (GICs), and Money Market Funds. Here’s how to choose.
| Factor | HISA | GIC (1-year) | Money Market Fund |
| Typical Rate (2026) | 3.5–4.5% | 4.5–5.5% | 4.5–5.2% |
| Liquidity | Anytime | Locked for term | T+1 to T+2 days |
| Rate guarantee | Variable | Fixed for term | Variable daily |
| Insurance | CDIC (up to $100K) | CDIC (up to $100K) | Not insured (very safe) |
| Tax efficiency | Fully taxable | Fully taxable | Fully taxable |
| Best for | Emergency fund | Savings you won’t need | Short-term parking |
When to Choose Each
HISA: Your emergency fund and any savings you might need within 3 months. The highest possible liquidity at a good rate.
GIC: Money you’re confident you won’t need for the term period (3 months to 5 years). The rate premium over HISAs is real but modest. Consider a GIC ladder — split savings across multiple maturity dates for flexibility.
Money Market Fund: Short-term parking of investment cash while you decide what to do next. Used by investors between positions. Not for emergency funds.
The GIC Ladder Strategy
Instead of locking all savings in one GIC, divide into 5 equal portions in 1-year, 2-year, 3-year, 4-year, and 5-year GICs. Each year, one matures — giving you annual liquidity and long-term rate benefits.
| Disclaimer: This article is for educational purposes only and does not constitute financial advice. All investments carry risk. Please consult a qualified financial advisor before making investment decisions. |
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