BMO GIC review

Earn competitive rates and lock in a guaranteed return of your principal investment with a BMO GIC.

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If you’re looking for a low-risk investment that will protect your principal investment, then a BMO GIC could be a good fit for you. This big five Canadian bank offers flexible terms and competitive rates on its cashable and non-cashable GICs. You can lock in fixed or variable rates, and any deposit with less than a five-year term will be insured for up to $100,000.

Compare BMO with other providers to find out how it stacks up to the competition and learn more about how you can apply for a GIC online in a matter of minutes.

What is a BMO GIC and why should I consider one?

A BMO Guaranteed Investment Certificate (or GIC for short) is a savings plan designed to protect your principal investment and give you a fixed or variable return on interest. A fixed rate will give you a guaranteed return on interest while a variable rate will fluctuate according to market conditions.

These investments can be either non-redeemable or cashable, with different guidelines on how you can access funds. Non-redeemables are a little bit more strict and you’ll have to pay a penalty to take your money out before your term is up. Cashable GICs are more flexible and let you take your money out whenever you want without a hassle.

Types of BMO GICs

BMO offers a wide range of registered and non-registered GICs, so you can pick whichever one you think is the best fit for your financial situation.

Cashable GICs

BMO has a number of GICs that let you take your money out at any point without penalty. The standard one-year fixed rate GIC gives a flat return but you can also get a variable rate GIC that fluctuates according to the stock market.

If you want to lock your money into a cashable GIC for a longer term, you can check out BMO’s RateRiser GIC, which gives higher interest rates with each passing year. These investments are useful if you’re not sure when you might need access to your money, but you want to earn interest on your “rainy day” or emergency fund.

Market linked GICs

These GICs are listed as “BMO Progressive” investments and come with variable interest rates tied to the performance of a specific index in the stock market. Indexes are linked to some of the best performing companies in Canada and the US, as well as several of Canada’s top banks and utility companies.

Some of these products allow you to lock in a guaranteed minimum return on investment (around 0.5% per year). You can also earn much higher interest rates over the course of your term if your index does really well. Just be aware that the rates on offer are spread over the number of years that your money is invested and aren’t an annualized rate. This means that your actual earnings per year will be much lower than what’s advertised.

Non-cashable GICs

Non-cashable GICs can’t be cashed in early but come with higher interest rates to compensate. You can lock in a short-term non-cashable GIC from 30 to 359 days, with interest rates as high as 1.15%. Long-term GICs range from 6 months to 20 years, with interest rates going as high as 2%.

These investments can be a good fit if you have some spare change kicking around that you know you won’t need to access in the near future.

US dollar GICs

BMO offers short and long-term GICs in US dollars. This allows you to earn interest in foreign currency, which can be a good fall back if the Canadian dollar isn’t performing well.

These investments are good for people who earn an income in US dollars. They can also be used to “buy” foreign currency when exchange rates are good so that you don’t have to exchange money at lower rates when you travel.

Special offer GICs

Some of BMO’s GICs also come with unique selling points worth mentioning. If you’re an AIR MILES collector, BMO offers a GIC that pays out AIR MILES in lieu of interest. You can also take advantage of a GIC that will pay you an income each month from its holdings.

Another unique product is the RateRiser GIC, which helps you to ladder your investments to get a higher return each year.

Why should I invest in a BMO GIC?

  • Guaranteed return. All of BMO’s GICs offer a guaranteed return of your principal investment along with competitive interest rates.
  • Competitive rates. BMO offers higher returns on interest than some of the other big five Canadian banks.
  • Many different terms. Terms are flexible and can range from as little as one day up to 20 years, with higher interest rates paid out for longer terms.
  • Unique selling points. Some GICs offer special features like flexible payment schedules, bonus rates and AIR MILES in lieu of a return on interest.
  • Deposits are insured. Any money you put in for less than five years is insured up to $100,000 through the Canada Deposit Insurance Corporation (CDIC).
  • Easy to purchase. It only takes a couple of minutes to buy these GICs online, in-person or over the phone.

What should I look out for?

  • High minimum investment. Many of BMO’s GICs require a minimum investment of $1,000 to get started.
  • Difficult to cash in early. Non-redeemable GICs are locked in over a specific term, and you may be charged a penalty to take money out early.
  • Unable to cope with inflation. Depending on how long you invest your funds, your interest rates may not be able to keep pace with inflation.
  • Long terms on variable rate GICs. Almost all of BMO’s market-linked products carry a term of between three and five years, so you’ll need to invest for longer if you want to “play the market”.
  • Interest subject to taxation. You’ll have to pay taxes on any interest you earn unless your GIC is held in a registered account (like a TFSA, RESP or RRSP).

How to apply for a BMO GIC

If you’ve compared a good mix of big five and online GIC providers and are set on going with BMO, then you’ll need to make sure you qualify before you apply.

Eligibility requirements

  • To apply for a BMO GIC, you’ll need to meet the following criteria:
  • Be a Canadian citizen or permanent resident who is at least 18 years old (19 in some provinces).
  • Have a BMO account to fund your investment or apply for an account online.
  • Have at least $1,000 to invest.

You will also need to provide the following documents and information:

  • Your name, residential status and contact information.
  • Your social insurance number and date of birth.
  • Your email address and phone number.

How can I buy a BMO GIC?

You can invest in a BMO GIC by applying with your online banking account. You can also use the table above to compare some of the products we’ve covered in this post.

Click through to BMO’s website to find out more about any GIC you might be interested in. You can also follow through to register for an account if you don’t have one. Just make sure you have a minimum of $1,000 to invest before you get started.

How does BMO compare to other banks?

BMO is a top five Canadian bank with a decent reputation. It’s Canada’s oldest financial institution and operates 900 branches across the country. It has a user-friendly mobile banking platform and provides customer service in-person and over the phone. In terms of GICs, it offers competitive rates compared to other banks and is protected by the Canada Deposit Insurance Corporation (CDIC).

BMO ratings, reviews and complaints

BMO has received a wide range of feedback online. Some clients are happy with the customer service and options for financing. Others complain about long wait times, inefficient service and cancelled transactions. BMO has also received low ratings on customer review sites like Trustpilot (but so have all of the other big five banks).

Bottom line

BMO has a full suite of GICs offering competitive rates and flexible terms. You can learn more about these products by speaking to a BMO advisor or by clicking through to their website on the table above.

Frequently asked questions about BMO GICs

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