March 15, 2023

When should I buy a GIC?

GICs exist for very specific use-cases - let's explore how they fall into your time horizon.



People have been asking…

…and immediately we thought…

but it’s a good question, with lots to unpack:

Stock returns are based on a premium over safer investments. Investors require an additive return to take on additional risk. When interest rates increase, so do expected returns on stocks.

From 1980 to 1985, GIC rates were between 10-15%. Yet over those six years, stocks beat GIC returns. If you factor in that stock returns compound and attract less tax, stocks CRUSHED GIC returns.

Data adapted from Furtado, A.

These types of narratives boil down to “this time it’s different” arguments.

Those words are often described as the most dangerous words in investing.

It pays to be an optimist. The chart below shows that bad headlines don’t stop the market from going higher.

GICs are taxed as interest income - the highest rate!

Returns from dividends and capital gains attract a much lower tax treatment. Additionally, long-term investors don’t have to sell their stock returns; this defers tax and allows for additional dollars to compound.

Yes, GICs pay 5%. Inflation is at 7%.

When you invest in GICs, you lock in a loss of purchasing power.

The chart below categorizes each year of stock market performance from 1926-2021. The take aways:

  • Markets go up 75% of the time
  • When markets go up, they usually go up by much more than 5% (orange box)

Camber provides unbiased and independent investment recommendations. You pay us to worry about finding the best investment solutions, so you don't have to. If we found that GICs were a suitable option for you, we would let you know.

As always, please reach out to any of our team members if you have questions or concerns - we're here to help.

To book a one on one consultation with our team please click here.

The reports and information contained herein are used for illustrative purposes and should not be interpreted as investment advice or recommendation. Investors should seek professional financial advice regarding the appropriateness of investing in any investment strategy or security, taking into consideration their unique investment objectives, financial profile, and risk tolerance. Performance data shown represents past performance. Past performance is no guarantee of future results, and current performance may be higher or lower than the performance shown. Performance for periods greater than one year is annualized unless specified otherwise. Selection of funds, indices, and time periods presented are chosen by Camber. S&P/TSX Composite Index used for illustrative purposes and is not reflective of a global index. Indices are not available for direct investment, and performance does not reflect expenses of an actual portfolio. Any reference to portfolio performance is gross of fees paid to Camber.


Furtado, A. (2022, April 27). The history of GIC rates. Retrieved March 12, 2023, from