The Best Equitable Bank GIC Rates in October 2024
Investors in Canada seeking stability for their savings often turn to Guaranteed Investment Certificates (GICs) as a secure investment option. They typically yield a bit more than treasury bills and don’t fluctuate in price.
Equitable Bank, a notable online bank in Canada and what I view to be one of the best banks in the country, offers various GIC products designed to meet the needs of savers looking for competitive rates and flexible terms.
In fact, I’d argue they have one of the most comprehensive suites of GIC products out there, and some of the best GIC rates in Canada.
Their GIC portfolio includes options for short-term savings goals as well as longer-term investment plans, catering to a multitude of investors.
Equitable Bank’s GIC rates are structured to offer attractive returns, combining security with profitability. The fact they are an online bank allows them to operate with lower overhead and tighter spreads. So, you’ll often see the bank offer better rates than major institutions like Royal Bank and Scotiabank.
In addition, the bank is a member of the Canada Deposit Insurance Corporation (CDIC), meaning your GICs will be insured up to $100,000 in the case the bank defaults.
Let’s go over the best Equitable Bank GIC rates you can get right now.
The best Equitable Bank GIC rates
Short-Term GICs
Equitable Bank’s short-term GICs are available for terms ranging from 30 to 270 days and have a relatively low minimum deposit. These investment options are suited for investors seeking a safe place to park their funds for a few months.
Short-term GICs often have lower interest rates compared to long-term options, reflecting the brief investment period.
Long-Term GICs
On the other hand, long-term GICs at Equitable Bank are designed for those looking to invest for periods from one to ten years. The longer the term, the higher the potential interest rate, rewarding investors for committing their money for an extended time.
This option is ideal for those who wish to secure part of their financial future with guaranteed returns.
Special GIC Rates
From time to time, Equitable Bank may provide special GIC rates for new or existing clients, or they could have promotion rates for a TFSA GIC or an RSP GIC.
These rates are often higher than standard offerings and may come with specific terms and conditions. Investors should keep an eye out for these opportunities to maximize their earnings.
Unlike the other major institutions, Equitable doesn’t have market-linked GICs yet.
How to buy a GIC From Equitable Bank
Investing in a Guaranteed Investment Certificate (GIC) from Equitable Bank is a straightforward process that allows investors to earn competitive interest rates on their savings.
To get started, all you really need is the Equitable Bank app and an open account. It could be a TFSA savings account, an RSP Savings Account, or even just a normal savings account from Equitable, and you can buy a GIC in any of them.
Step 1: Choose the type of GIC
Equitable Bank offers a variety of GIC term options, allowing investors to select the timeline that best fits their financial goals.
They can opt for short-term or long-term GICs, balancing between flexibility and potential return. They provide both registered GICs and non-registered GICs, affording various tax-advantaged growth opportunities or flexibility, respectively.
Customers can choose from a range of terms and interest rate options, whether they are interested in locking in funds for a few months or several years.
As mentioned, the bank’s GIC products include Tax-Free Savings Account (TFSA) eligible GICs, making them a feasible choice for individuals aiming to grow their investments tax-free.
Step 2: Pick the account you want to buy the GIC in
Investors need to decide whether they prefer their GIC within a registered account like an RRSP or TFSA, which offers tax benefits such as tax-deferred or tax-free growth, or a non-registered account.
Equitable Bank allows customers to purchase a GIC in either type of account and may even offer different promotional rates depending on the account you hold them in.
Regardless of the account you purchase them in, they’ll have CDIC protection up to a particular amount.
Step 3: Buying the GIC
Once the type of GIC and account have been selected, customers can proceed to buy the GIC. This usually involves logging in to their Equitable Bank or EQ Bank account online, selecting the desired GIC with its respective interest rate, and completing the transaction.
Often, you don’t even need to contact support and can purchase the GIC in minutes. However, they’re always around to help if you want to speak with them.
Alternative fixed-income products at Equitable Bank
Investors seeking stability and consistent returns often look to fixed-income products, and Equitable Bank provides an array of options. However, locking up your money in a GIC may not be the best option for you. Here are some alternatives.
EQ Bank Personal Account
Fortunately, beyond Guaranteed Investment Certificates (GICs), Equitable offers what I believe to be one of the best high-interest savings accounts possible for liquidity and interest, that being EQ Bank’s Personal Account (formerly the Savings Plus Account).
For savers who want liquidity, this HISA offers competitive interest rates with the flexibility to withdraw funds at any time. Interest is calculated daily and paid monthly.
Yes, EQ Bank GIC rates are a bit higher. However, you have complete liquidity with the savings account.
And with an EQ Bank Card, the savings account essentially functions as a chequing account. I have the account and card myself, and I utilize it for my everyday banking needs. Bill payments, Interac E-Transfers, a night out at a restaurant. It’s an amazing account.
If I need money, I fund the card via my mobile app and utilize any ATM in Canada for free withdrawals. In addition to this, I get unlimited transactions, no fees and no account minimums.
You simply cannot find this type of account with a traditional brick-and-mortar bank. Yes, some banks will offer the same functionality above with no monthly fee, but it often requires a high minimum balance or some other stipulation.
Keep in mind that they also offer this as a joint account, simply called the Joint Personal Account.
EQ Bank cashable GICs
Cashable GICs provide a means for investors to earn a fixed interest rate, with the option to cash out without penalty after an initial lock-in period.
This could be a great choice for those who may need access to their funds yet still desire to benefit from higher returns than standard savings accounts.
Alternatively, non-redeemable GICs typically offer a higher interest rate than their cashable counterparts, rewarding investors for committing their money for a fixed term. They are an excellent way for investors to add predictability to their portfolio, as they lock in their rate for the term’s duration.
I’m not a huge fan of these types of products, but I’ll list them as alternatives nonetheless. I believe, especially with a bank like Equitable, that you may be better off just utilizing the high rate of interest offered on their savings account over a cashable GIC.
Should you be buying a GIC right now?
In the current financial climate, individuals considering Guaranteed Investment Certificates (GICs) need to decide if they’re the right investment for their current risk tolerance and goals.
Remember, for the most part, you will not be able to access the money for the entire GIC term unless you opt for a cashable GIC.
So, it’s best to utilize money that you have no plans of using for the term you choose.
Fortunately, Equitable Bank offers various term options to maximize earnings for both short-term and long-term goals potentially.
Those looking to invest in GICs should consider the minimum and maximum deposit requirements, as they can vary between financial products and institutions. Equitable Bank, alongside other banks, sets these minimums and maximums to manage their investment portfolio efficiently.
There is also the added difficulty that interest rates tend to fluctuate constantly, which, in the end, will impact the overall effectiveness of your GIC.
Yes, you could utilize a GIC laddering strategy to stagger your maturity dates and mitigate the interest rate risk that is present with every GIC. However, you still never truly know which direction rates are headed in.
The opportunity cost in relation to GICs and other higher risk investment vehicles like stocks, ETFs, or mutual funds, does exist as well. GICs are an outstanding option for those who want to earn returns on capital they cannot afford to lose, like a down payment on a first home.
However, the stock market has historically outperformed fixed-income investments for capital they have no need for over the long term.
This is something you ultimately need to decide for yourself.