How often should I use the GIC rate?

If you're trying to estimate the performance of a portfolio of 5 year GICs you can't use the posted rate in each year. You have to use some sort of blend of the preceding 5 years. Or only reset the rate every 5 years. Also worth noting - it's striking how well XBB has done over the long run, i guess as interest rates have fallen.

What is a 5 year GIC?

A 5-year GIC is a type of investment that allows you to earn a fixed rate of interest over a five-year period. Your money is invested for the entire 5-year term, and at the end of the 5-years, you will receive your original investment plus interest that has accrued.

Will GIC rates stay at 5% in 2022?

Here are the 5-yr GIC rates for January 1 to September 30, 2022. Clearly, the big increase earlier this year has paused. Will it stay around 5% for the most competitive banks, start to trend back down or, continue its ascent. No one knows , which doesn’t stop everyone from making a prediction.

Why are short term GIC rates so high?

Therefore shorter term GICs is high because demand for shorter term mortgages is high. Everyone saying that GIC rates are based on the bond market needs to explain what they thing the banks will do with this money, and why they wouldn’t stop issuing 1 year GICs in favour of 5 year GICs.