Are GICs Still Worth Buying After Recent Rate Cuts?

In March, the Bank of Canada lowered its policy interest rate by 25 basis points, bringing it down from 3.00% to 2.75%. This marked the central bank’s seventh consecutive rate cut. For Canadians, that shift affects both borrowing costs and returns on savings.

Lower rates can be good news for borrowers: mortgage lenders and other loan providers generally begin offering lower rates as the central bank eases. For savers, however, the picture is mixed. Guaranteed investment certificates (GICs), a common short-term savings vehicle in Canada, have seen rates fall along with the policy rate. For those looking to park cash safely while earning reasonable interest and keeping access to funds, high-interest savings accounts (HISAs) have become an increasingly attractive alternative.

Grow your savings with a high-interest savings account

As GIC yields have declined, many Canadians are re-evaluating where to keep short-term cash. A HISA offers liquidity and flexibility that a GIC typically does not: deposits remain accessible, withdrawals are easy, and most HISAs function like regular savings accounts but with better interest rates. If you’re saving for a renovation, a vacation, or helping a family member with a down payment, a HISA lets you earn competitive interest while keeping your money available when you need it.

Which is better: a GIC or a HISA?

The right choice depends on your goals and timeline. If you need an emergency fund that must remain accessible, a HISA is typically a better fit because it combines easy access with competitive interest. If you’re parking proceeds from a home sale or holding cash you won’t touch for a fixed period, a GIC can still make sense—especially when one-year GICs offer reasonable returns.

For people approaching or in retirement, preserving capital often takes priority. Many retirees shift savings into conservative instruments. While GICs used to command substantially higher rates, current market conditions mean a HISA may now offer similar yields with the added benefit of liquidity, making it an appealing alternative for some savers.

Pros and cons of GICs and HISAs

Comparing the two options helps clarify which suits your situation.

	GICs	HISAs
Pros	• Competitive one-year GIC rates still available • Can be held in registered and non-registered accounts • Eligible for CDIC coverage	• Greater flexibility and immediate access to funds • Often feature attractive promotional rates • Eligible for CDIC coverage
Cons	• Funds are typically locked in for a set term • Rates have been declining from earlier highs • Less flexibility if you need cash quickly	• Interest in non-registered HISAs is taxable • Rates can change over time

Grow your savings with Simplii Financial’s HISA

Simplii Financial provides online and mobile banking to millions of Canadians with no monthly fees and access to a large ATM network through a partner bank. Simplii’s HISA features no transaction or monthly fees, no minimum balance requirement, and options such as automatic deposits to help you save consistently. You can access your cash when needed while earning a higher rate than a standard savings account.

Promotional rates and terms can change, so review the current offer and fine print on the provider’s site before opening an account. Interest is typically calculated daily based on the annual rate and paid monthly; rates are subject to change.

Final thoughts on GICs and HISAs

GICs remain a favored option for Canadians who want guaranteed returns and are comfortable locking in funds. However, HISAs have become a strong alternative for short-term savings or when flexibility matters. If you need quick access to your money or you prefer not to commit to a term, a HISA can keep your funds accessible while still earning competitive interest.

More on savings:

• 3 financial goals to kick-start the new year
• Your home sold—now what?
• HISAs vs. bonds and GICs: Where should Canadians hold their cash?
• The one inflation tool you need for your finances
• Planning holiday spending and cash gifts? Here’s how to boost your budget