Long-term GICs generally earn interest at a higher rate. However, your funds are locked in until maturity.
A GIC laddering strategy lets you maximize your returns but still cash in part of your investment every year—for the best of both worlds.
Your principal is split into equal portions which are then invested in a different GIC for a term of 1 to 5 years. If you invest $5,000, for example: $1,000 is invested in a 1-year GIC, $1,000 is invested in a 2-year GIC, and so on.
Each year, the maturing GIC is automatically reinvested for a 5-year term. After five years, you'll have five 5-year GICs with staggered maturity dates.
Ready to set up a laddering strategy?
Whether interest rates are up or down, you'll always get the best rate by renewing your GIC for a 5-year term. You can also access part of your investment each year.