GIC vs HISA vs Savings Account: Where to Put Your Cash
You have cash to save. Here's how to choose the right account for your situation.
When you have cash you don't want to invest in the market, you have three main options: GICs, high-interest savings accounts, or regular savings accounts. The right choice depends on whether you need access to the money.
Quick Comparison
| Feature | GIC | HISA | Regular Savings |
|---|---|---|---|
| Typical Rate | 4-5% | 3-4% | 0.5-2% |
| Access | |||
| Rate Guaranteed | Yes (term) | No (variable) | No |
| Best For | Fixed goals | Emergency fund | Daily banking |
GICs (Guaranteed Investment Certificates)
GICs lock your money for a fixed term (30 days to 5 years) in exchange for a guaranteed interest rate. The longer the term, typically the higher the rate.
GIC Pros:
- Highest guaranteed rates
- Rate locked in - won't drop
- CDIC insured up to $100,000
- Forces you to save (can't spend it)
GIC Cons:
- Money locked - early withdrawal penalties
- Miss out if rates rise during your term
- Not suitable for emergency funds
HISAs (High-Interest Savings Accounts)
HISAs offer higher rates than regular savings while keeping your money fully accessible. Rates are variable - they can go up or down with market conditions.
Best HISA Use Case: Emergency Fund
You need instant access to emergency money. A HISA gives you decent returns while keeping funds available.
My Recommendation by Goal
TFSA vs Non-Registered: Where to Hold Cash
Both GICs and HISAs can be held inside or outside a TFSA. Interest is taxable, so holding them in a TFSA makes sense if you have room. But if your TFSA is invested for growth, a non-registered HISA for emergency funds is fine.
The Bottom Line
There's no single "best" option - it depends on your needs. Use HISAs for money you might need anytime (emergency fund), GICs for money with a known future date (down payment, tuition), and don't overthink regular savings for daily banking float.
Related Guides:
Build Your Emergency Fund
Waypoint Budget helps you track savings goals and build your emergency fund over time.