A ladder is five GICs of one to five years instead of one GIC of five years. Each year one matures, and you either spend it or roll it into a new five-year rung.
Why it works
- Liquidity every twelve months, instead of once in five years.
- The average yield trends toward the five-year rate as the ladder matures.
- No single reinvestment date, which removes most of the timing risk.
| Rung | Amount | Indicative rate | Matures |
|---|---|---|---|
| 1 year | $10,000 | 3.85% | 2027 |
| 2 year | $10,000 | 3.95% | 2028 |
| 3 year | $10,000 | 4.05% | 2029 |
| 4 year | $10,000 | 4.10% | 2030 |
| 5 year | $10,000 | 4.20% | 2031 |
The tax detail that decides where to hold them
GIC interest is taxed as ordinary income at your full marginal rate — the least favourable treatment of any investment return. At a 43% rate, a 4.2% GIC yields 2.39% after tax. Hold GICs inside a TFSA or an RRSP wherever you have the room.
Deposits at CDIC member institutions are insured to $100,000 per category, per institution. A large ladder may be worth splitting across two issuers.
Run it on your own numbersETF growthFor money you will not need for a decade, compare a GIC against a low-cost ETF.Figures are the published 2026 federal and provincial amounts at the time of writing. General information only, not financial, tax, or legal advice — see the methodology and disclaimer.