How the humble GIC became a portfolio game changer in 2023

2023 marks the year that the humble guaranteed investment certificate (GIC) became a superstar.

A series of interest rate hikes by the Bank of Canada starting in early 2022 has propelled GIC yields from below one per cent to as high as 5.75 per cent.

For Canadians investing for retirement, the advent of higher fixed-income payouts brings a safer way to compound returns over time. A five per cent annual return over 30 years, for example, adds up to $348,800 – nearly $200,000 of it as interest alone. 

The rise in fixed-income yields also rekindles a long-term portfolio strategy that adds a fresh element of safety without sacrificing growth.