TD GIC review

What is a TD GIC?

A TD Guaranteed Investment Certificate (GIC) is a low-risk investment in which funds are locked up for a period of time, after which, the money is paid back with interest. TD GIC rates are fixed, not variable, and there’s no risk of losing your principal. Terms range from one day to five years. You can choose between cashable, non-cashable, market growth and US dollar GICs.

Here’s what you need to know about investing in TD GICs, including TD GIC rates and special offers.

Types of TD GICs

TD Bank offers four types of GICs:

Cashable

A TD Cashable GIC can be redeemed before the term is up, meaning you can withdraw your initial investment early. Short and long-term certificates are available. You may earn a lower rate of return for redeeming before the expiration date, and rates are usually lower than non-cashable GICs.

Non-cashable

TD non-cashable GICs can’t be redeemed before the term expires, so your funds are locked in until the maturity date. Even though funds are less liquid than with cashable GICs, rates are higher and terms are more flexible. You can choose to invest your money for anywhere between 30 days and five years.

US Dollar GICs & Term Deposits

When the Canadian dollar goes down in value, holding funds in TD US dollar GICs can help protect you from loss. It’s also a good way to earn interest from any US dollars you’re holding onto until you can convert at a desirable exchange rate. Terms range from one day to five years, and both cashable and non-cashable options are available.

Market Growth

With a TD market growth GIC, your principal investment is protected, and your returns depend on the performance of certain stock or bond indices. What’s great about market growth GICs is that you can benefit from the potential gains of the stock market without any risk of loss. But stocks and equities can underperform, so there’s always the possibility of earning less than you hope for.

TD offers three types of market growth GICs. The TD Canadian Banking & Utilities GIC is equally linked to the S&P/TSX Bank Index and the S&P/TSX Capped Utilities Index. The TD Canadian Banks GIC tracks the S&P/TSX Bank Index, and the TD U.S. Top 500 GIC tracks the S&P 500 Index.

TD GIC rates

Regular TD GIC interest rates start at 0.50% for the first year of the cashable 5-Year Stepper GIC and can exceed 10% with 5-year market growth GICs. As of the time of writing, a 1-year non-cashable certificate yields a 3.9% rate of return.

Short-term GIC interest rates

Short-term TD GICs mature in one day to just under one year. Here’s what you could earn with a non-cashable TD Short-Term Guaranteed Investment Certificate held in a registered TFSA or a non-registered account.

Rates last verified on August 29, 2024.

Long-term GIC interest rates

Your funds will be locked up for one to five years with a long-term TD GIC. There are many types of certificates available, but here’s an example of what you could earn with a non-cashable TD GIC (compound interest option).

Rates last verified on August 29, 2024.

Are there any TD GIC special offers?

TD offers some GICs with special, limited-time promotional rates. As of the time of writing, you could earn 4% on 100-day cashable certificates or up to 4.10% on a 14-month non-cashable certificate. As with all GICs, your principal is protected against loss. But not all accounts may be eligible for special deals.

Why should I invest in a TD GIC?

• Low-risk product. TD promises a guaranteed return of your principal investment on all its GICs. No matter what, you’ll earn a minimum return, even for market-linked products.
• Competitive returns. Your earnings depend on which investment you choose, but TD’s GIC rates are competitive with rates you’ll find at other major Canadian banks.
• Many different terms. TD offers a number of different term lengths. If you want to make a short-term investment, look into cashable or US dollar GICs for terms as short as 1 day. For a higher return, commit your money for up to five years.
• CDIC insured. In the unlikely event TD Bank fails, you won’t lose your investment, although certain limits apply. GICs held in an eligible account like a TFSA or RRSP are covered by the Canada Deposit Insurance Corporation up to $100,000.
• Easy access to customer service. TD provides customer service through many different channels, so you can troubleshoot any issues you might have quickly and efficiently. Manage your investments over the phone, online and in person at a local branch.

What should I look out for?

• High minimum investment. You’ll be required to invest as much as $500 for most TD GIC investments. Some US dollar GICs require a minimum investment of $1,000 USD.
• Some GICs are difficult to cash in early. You won’t be able to cash in a TD non-cashable GIC before the mature date, which makes it difficult to access your funds if there’s an emergency.
• Interest may be taxable. Unless you hold your TD GIC in a tax-sheltered account like a TFSA, you’ll pay income tax on any interest earned.

How to get a TD GIC

If you’ve compared other GIC providers and think a TD GIC is a good fit, login to online banking or visit a local bank branch.

Eligibility requirements

To buy a TD GIC, you must meet the following criteria:

• Be a Canadian resident who is at least the age of majority in your province or territory (18 or 19)
• Have a TD account (you can apply to open an account online)
• Have at least $500 to invest ($1,000 for some US dollar GICs)

You also need to provide the following documents and information:

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

How do TD GICs compare to GICs from other banks?

TD Bank is a Big Five Canadian bank with a decent reputation. It’s easy to invest online through TD Direct Investing. The bank also has over 1,000 branches across Canada, so it’s easy to get in-person help with your investments.

TD GIC rates are comparable to (in some cases, higher than) what other major banks and credit unions offer. If you prefer banking with an established bank that offers online and in-person support, TD GICs could be a good choice for you.