RBC GIC review

What is an RBC GIC?

An RBC Guaranteed Investment Certificate (GIC) is a low-risk investment in which you lock in funds for a set time and then get your money back with interest. The best part is that your principal investment is guaranteed—there’s no risk of loss. RBC GIC rates can be fixed or variable, you can choose between redeemable, non-redeemable, US dollar and market-linked options. Terms range from one day to ten years.

Not sure if RBC GICs are right for you? Let’s walk through how this type of investment works, including RBC GIC rates and special offers.

Types of RBC GICs

The Royal Bank broadly offers three types of GICs, each of which comes with different options:

Fixed-rate (guaranteed return)

If you want a certificate with predictable earnings and the lowest possible risk, then an RBC Guaranteed-Return GIC could be right for you. As the name suggests, this investment comes with a preset interest rate that doesn’t change, and you can lock in funds for short terms (1-364 days) or long terms (1-5, 7 or 10 years).

Be aware that the shorter the term, the higher the minimum investment amount. Terms under 30 days require $100,000 or more, while terms of one year or longer require $500 to $1,000, depending on the account type (TFSA, RRSP, RRIF, etc.).

Variable-rate

An RBC Interest Rate-Linked GIC lets you take advantage of favourable rate swings—but your earnings could be lower than expected if the prime rate goes down. Variable-rate GICs are only available for one-year terms and require a minimum upfront investment of $5,000.

The benefit is that you can fully or partially redeem your investment any time if rates go down or you find a better opportunity elsewhere. You’ll earn interest if you redeem 30 days or more into your term, and payments can be made monthly, semi-annually or at the date of maturity.

Equity-linked

This type of investment protects your principal investment against loss but allows you to gain when the stock market performs well. The minimum investment for an RBC equity-linked GIC is $1,000, funds are non-redeemable and you can choose between a two-, three- or five-year term.

Options are plentiful with GICs linked to Canadian, US, and ESG (environmental, social and governance) investments.

US dollar term deposits

If the Canadian dollar weakens while the US dollar gets stronger, holding funds in an RBC US Dollar Term Deposit could help minimize your CAD losses. These GICs are non-redeemable and come with a fixed interest rate, so your funds are locked in. Both short- and long-term investments are available, and the longer your term, the lower your minimum investment amount.

RBC GIC rates

RBC GIC interest rates start at 2.125% with a one-year cashable deposit (monthly payments) and go as high as 4.95% with a one-year interest-linked deposit of $1 million or more (payment semi-annually or at maturity). Bear in mind that equity-linked GICs could potentially yield higher earnings.

Short-term GIC interest rates

Short-term RBC GICs expire anywhere from one day to just under one year. Here’s what you could earn with a non-redeemable fixed-rate RBC GIC, assuming payments are made annually, semi-annually or at maturity.

Rates last verified on July 6, 2024.

Long-term GIC interest rates

A long-term RBC GIC locks in your investment for a period of one year up to 10 years. Here’s what you could earn with a non-redeemable, fixed-rate Royal Bank GIC.

Rates last verified on July 6, 2024.

Are there any RBC GIC special offers?

Occasionally, RBC offers special rates on select GICs. As of the time of writing, you can earn 3% interest on a one-year redeemable GIC (up from 2.25%) or 4.1%-4.5% on redeemable GICs (up from 4%).

One stand-out feature of market-linked Royal Bank GICs is the option to choose whether to base your investment on Canadian or US equities. Socially-conscious investors can even opt for ESG investing. Not all GIC issuers in Canada offer this variety.

Why should I invest in an RBC GIC?

• No losses. The best part about investing in a Royal Bank GIC is that you’ll never lose money. Your principle is guaranteed. Some GICs even offer guaranteed returns.
• Competitive rates. BMO GIC interest rates are in line with what other major Canadian banks are offering. Returns can potentially be even higher with some market-linked investments.
• Variety of terms. Terms range from as little as one day up to 10 years. The longer your term, the higher your potential earnings.
• Special offers. RBC sometimes offers special higher rates on GICs, letting you earn even more from this low-risk investment.
• Track investments online or via mobile app. A decent mobile banking app for tracking your investments isn’t something that all banks offer. But RBC does.
• Convenient and widely accessible. As the largest Canadian bank, RBC has one of the widest branch and ATM networks in Canada. You can buy RBC GICs online or get help in-person at a local branch.
• CDIC insured. Your RBC GIC deposits are insured by the Canada Deposit Insurance Corporation up to $100,000 as long as funds are held in an eligible account like a TFSA, RRSP or RRIF.

What should I look out for?

• High minimum investment. Depending on your term length and the type of GIC you choose, you might have to shell out as much as $100,000 for an RBC GIC (but the minimum for most options is lower).
• Could get better rates elsewhere. While RBC GIC interest rates generally keep pace with other major banks, you might get higher rates from online banks and credit unions.
• May not beat inflation. Depending on how long you invest your funds, your interest rates may not be able to keep pace with inflation, which is usually between 1% and 3% according to the Bank of Canada.
• Lower rates for monthly payments. If you choose monthly payments instead of semi-annual, annual or end-of-term payments, your interest rate will be lower.
• Earnings are taxable. If you don’t hold your GIC in a tax sheltered account like a TFSA or RRSP, the CRA will want you to pay income tax on your interest earnings.

How to get an RBC GIC

To buy RBC GICs, you can login to online banking, phone customer service or visit a local bank branch.

Eligibility requirements

• Reside in Canada and be at least the age of majority in your province or territory (18 or 19)
• Have an RBC account to fund your investment (you can apply to open an account online)
• Have the minimum required investment amount for the GIC you choose (ranges from $500 to $100,000)

Documents

• Your name, residential status and contact information
• Your Social Insurance Number (SIN) and date of birth
• Your email address and phone number

How do RBC GICs compare to GICs from other banks?

RBC is Canada’s largest bank by market capitalization and one of Canada’s Big Five banks. While some smaller banks and credit unions aren’t open to residents of Quebec, RBC is available Canada wide.

Compared to its Big Bank counterparts, RBC GIC rates are competitive but sometimes lower. You can likely get stronger GIC interest rates from alternative financial institutions like online banks and credit unions.

But if you’re already an RBC customer and prefer to keep all your financial activity under one, well-established roof, an RBC GIC could be right for you.