CIBC GIC Review

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

A CIBC Guaranteed Investment Certificate (or GIC for short) is a low-risk investment that promises to return all of your principal when it matures in addition to earning you interest.

You can get either a non-redeemable or cashable GIC, depending on when you need access to your funds. Non-redeemable GICs charge a penalty for early withdrawal, while you can access cashable GICs at any time.

You can also lock in a fixed rate or a variable rate, depending on how much risk you want to take with your money. A fixed rate offers a guaranteed return on interest while a variable rate can fluctuate according to market conditions.

Types of CIBC GICs

There are many types of GICs on offer from CIBC designed to fit every financial situation. Most products can be held in either a registered or non-registered account, which will affect whether your earnings are taxed.

Cashable GICs

CIBC offers a number of GICs that let you take your money out at any point without penalty. You can lock in a fixed interest rate, with rates sitting around 3% to 5.5%, or a variable rate that fluctuates according to the stock market.

You can also get an “elevator” GIC that offers higher interest rates with each passing year. These investments are a suitable option if you want to earn money on your “rainy day” or emergency fund without tying your money up in the long term.

Market-linked GICs

With a market-linked GIC, you’ll get fluctuating interest rates tied to the performance of a specific index in the stock market. CIBC offers a number of variable rate GICs with terms between two and five years.

Potential returns aren’t listed on CIBC’s website, so it’s unclear how much interest you could stand to make on these GICs. That said, most market-linked GICs have a higher earning potential than fixed rate GICs (although they come with a higher level of risk).

You might like to consider this type of GIC if you want to safely “play the market” and don’t mind locking your funds away for a couple of years.

Non-redeemable GICs

Non-redeemable GICs have stricter redemption terms and you’ll have to pay a penalty to withdraw your funds before your investment matures. CIBC offers short-term non-redeemable GICs from 30 to 364 days, with interest rates as high as 0.15%.

You can also take out a long term GIC with terms between 1 and 7 years and interest rates sitting around 3.15% to 3.45%. These investments can help you save up for large purchases, or you can keep them in a registered account to help you save up for your retirement or your child’s post-secondary education.

Special offer GICs

CIBC also offers a couple of GICs with unique selling points. You can take advantage of a time-limited bonus rate GIC that offers as much as a 4.25% return on your investment. There’s also a “Save-up” GIC that lets you deposit funds into your GIC with compounding interest rates.

You can choose to ladder your investments through the “EasyBuilder GIC” or even earn a higher interest rate on deposits over $25,000 with the “T-Bill Rate” GIC.

Why should I invest in a CIBC GIC?

• Guaranteed return. You’ll get a guaranteed return of your principal investment on all GICs, and you may be able to qualify for a baseline return on market-linked products.
• Many different terms. You can invest in terms ranging from as little as one day up to seven years, with higher interest rates paid out for longer terms.
• Special features. Some GICs have unique selling points like bonus rates, flexible payment plans and automatic roll-overs.
• Deposits are insured. Any money you put in is insured up to $100,000 through the Canada Deposit Insurance Corporation (CDIC). This only applies to terms under five years.
• Easy to purchase. You can buy these GICs online, in-person or over the phone. You’ll also be able to contact customer service to manage your investments at any time.
• Counts as collateral for loans. CIBC will count any money in your GIC towards your eligibility to qualify for a loan.

What should I look out for?

• Low return. CIBC offers lower interest rates on its GICs than some other “big five” banks in Canada.
• High minimum investment. You may need to put in as much as $500 to get your investment started, which is more than other providers require.
• Difficult to cash in early. Non-redeemable GICs are hard to cash in before they mature, but you can take money out of cashable GICs at any time without penalty.
• Unable to cope with inflation. Long-term fixed rate GICs pay out less than 2% interest each year, which is unlikely to keep pace with inflation.
• Interest subject to taxation. You’ll have to pay taxes on any interest you make on your account unless it’s held in a registered GIC (like an RESP or RRSP).

How to apply for a CIBC GIC

If you’ve looked at a number of providers and think that a CIBC GIC is the best fit for you, it takes less than 10 minutes to apply online. You’ll just need to make sure you qualify before you get started.

Eligibility requirements

To apply for a CIBC 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 CIBC Personal Account or CIBC Personal Line of Credit to fund your investment – you can apply for an account online or open a GIC by visiting a branch
• Have at least $500 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 CIBC GIC?

You can buy a GIC from CIBC by applying online with a valid account. You can also use the table above to compare the different products on offer. Click through to CIBC’s website for more information and to register for an account if you don’t have one. Just make sure you have a minimum of $500 to invest before you go to the trouble.

How does CIBC compare to other banks?

CIBC is a top-five Canadian bank with a decent reputation. It has over 1,100 branches across Canada, along with a top-rated mobile banking platform. It is the smallest of the big banks in terms of revenue and is protected by the Canada Deposit Insurance Corporation (CDIC).

CIBC ratings, reviews and complaints

CIBC has received a wide range of feedback online. Customers seem to like the ease of setting up accounts and banking online, but they complain about inadequate customer service and hidden charges. CIBC has received low ratings on customer review sites like Trustpilot and PlanetRate.

Bottom line

CIBC offers a wide range of GICs with flexible terms and transparent rates. You can learn more about these products by speaking to a CIBC advisor or by clicking through to their website on the table above.

Frequently asked questions about CIBC GICs

• Will I need to have a CIBC account to open a GIC?

  If you want to take out a GIC, you’ll need to have an account. But don’t worry, you can set one up online in a matter of minutes. Get started by clicking through to CIBC’s website in the table above or visit a branch to speak to an agent.

• How often will interest be paid out for my GIC?

  This is completely up to you! Some GICs pay out monthly while others pay out annually or at maturity. You can decide what works best for you and set your payment plan accordingly.

• What happens to my principal investment once my term is up?

  Once your term ends, you’ll need to take your money out of your account or it may be rolled over into a long-term GIC with similar rates. It’s best to speak to CIBC directly for more information on how they return your principal at the end of your investment as it varies according to which product you invest in.

• Is it possible to get my money back before my GIC matures?

  It depends on what kind of GIC you have. If you have a non-redeemable product, it can be difficult (and expensive!) to get your money out before your GIC matures. But if you invest in a cashable GIC, you should be able to get it back whenever you need without a problem.

• Will I have to pay tax on my CIBC GIC?

  This depends on whether you have a registered or non-registered GIC. You’ll need to pay taxes on any interest you earn with a non-registered account. But if you have your money in a registered account like a TFSA, RRSP or RESP, then the interest you earn will be tax-free.

• I'm not a Canadian resident, can I still open a GIC?

  No. CIBC requires you to live in Canada and supply a Canadian address in order to open a GIC.

• Can I apply online?

  Yes, you can apply online via the CIBC website.