Simplii GIC review

What is a Simplii Financial GIC?

A Simplii Financial Guaranteed Investment Certificate (GIC) is a low-risk investment that locks in funds for a fixed period and then repays the money with interest. Your principal investment is guaranteed, so there’s no risk of loss. Simplii GIC rates are fixed, and terms range from one to five years.

Not sure if Simplii GICs are a good investment for you? Here’s what you need to know, including Simplii GIC rates and how the International Student GIC Program helps foreign students fund their studies in Canada.

Types of Simplii GICs

True to its name, Simplii Financial offers a simplified range of GIC products compared to Big Banks and other major financial institutions. You won’t have access to short-term, variable-rate or market-linked GICs, but you can access fixed-rate GICs with one- to five-year terms.

Invest for retirement

You can choose to hold a Simplii GIC in a Registered Retirement Savings Plan (RRSP), helping you save for your golden years. You don’t pay income tax on GICs purchased in an RRSP or on the interest earned on GICs. Instead, you’re taxed on withdrawals from your RRSP later in life.

Ladder your GICs

Laddering lets you respond to rate changes by staggering your investments. Instead of locking your money into one, long-term Simplii GIC, you have the option of splitting up your funds into multiple, shorter-term GICs with varying maturity dates.

For example, you could buy three $1,000 GICs that mature in one year, two years and three years, respectively. Say interest rates rise over the next few years. Instead of waiting for a single investment to mature so you can take advantage of higher rates, you can reinvest part of your money annually as each GIC matures.

But what if interest rates fall? Only part of your money gets freed up annually and is vulnerable to falling rates. The rest of your money stays locked in at a more favourable rate.

Withdraw under limited circumstance

Simplii GICs aren’t cashable, so you can’t cash in before the maturity date. But there are some exceptions. You can withdraw funds locked in a GIC if you intend to put the money towards (1) the Home Buyers’ Plan for first-time home buyers, (2) the Lifelong Learning Plan to finance you or your spouse or common law partner’s education or (3) if you’re experiencing extreme financial hardship (which is determined at Simplii’s discretion).

Simplii GIC rates

Simplii GIC interest rates start at 3.736% with a five-year deposit and go as high as 4.218% with a one-year deposit. Here’s what you could earn with a Simplii Financial GIC, which is fixed-rate and non-cashable. Interest is calculated daily and paid (or compounded) monthly.

Rates last verified on August 19, 2024.

What is the Simplii International Student GIC Program?

Foreign students who plan to study in Canada can maximize their education savings with the Simplii Financial International Student GIC Program. Students can open a Simplii account online and deposit up to $50,000. Simplii will invest 70% of the funds up to $14,444.50 in GICs to earn interest. The rest will be available in the student’s account, which Simplii will also pay into monthly.

Why should I invest in a Simplii GIC?

• Low minimum investment. Start investing in Simplii Financial GICs with as little as $100.
• No losses. One of the best perks of investing in a Simplii Financial GIC is the guarantee return. You’ll never lose money.
• Competitive rates. Simplii GIC interest rates are generally in line with other major banks in Canada.
• International Student GIC program. Foreign students studying in Canada can earn interest on their education savings.
• Convenient apps. Monitor your GIC investment online or via Simplii’s highly-rated mobile app, available for Android and iOS.
• CDIC insured. Simplii GICs are insured by the Canada Deposit Insurance Corporation up to $100,000.

What should I look out for?

• Limited options. Compared to other banks, Simplii’s investment terms and types are fairly limited. You can’t invest in cashable (or redeemable) GICs, variable-rate GICs or GICs that mature in less than 365 days. You also can’t hold GICs in a TFSA or RESP.
• CDIC coverage split between Simplii & CIBC. Simplii Financial is CDIC insured through its parent bank, CIBC. That means the $100,000 CDIC deposit limit includes both your Simplii and CIBC deposits.
• Earnings are taxable. If you don’t hold your GIC in a tax sheltered account like a RRSP, the CRA will want you to pay income tax on your interest earnings the year those earnings are received.
• Not available in Quebec. If you live in Quebec, you can’t invest in Simplii GICs or sign up for any other Simplii products and services.

How to get a Simplii GIC

To buy Simplii GICs, you need to login to Simplii’s online banking platform. If you’re not already a customer, you must sign up.

Eligibility

• Reside in Canada
• Be at least the age of majority in your province or territory (18 or 19)
• Have at least $100 to invest in GICs

Information

To become a Simplii customer, you’ll need to provide:

• Basic personal information like your name, date of birth, address and other contact information
• Your Social Insurance Number (SIN)—this is optional
• Valid, government-issued ID and proof of address

You must consent to a credit check, which may be asked to verify your identity, determine your financial reliability and assess your qualification for certain banking products and services.

How do Simplii GICs compare to GICs from other banks?

Simplii is owned by CIBC—one of Canada’s Big Five banks—but it’s GIC offerings are much more limited than its parent bank. Compared to major financial institutions, Simplii 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.

If you’re looking for a simple, straightforward way to buy GICs with a low minimum deposit and without the hassle of visiting a bank branch in person, Simplii could be worth looking into.