What Happens When a GIC Matures in Canada?
When a guaranteed investment certificate reaches the end of its term, it matures: your principal comes back to you, along with the interest it earned. What happens to that money next is a choice, and the maturity date is when you make it. You can move it into a new GIC, into a different investment, or out as cash.
Your principal
Comes back to you
A GIC guarantees your original deposit back on the maturity date. The interest was either paid out along the way or added on top.
Your options
Renew, reinvest, or cash out
Roll it into a new GIC, move the money into a different investment, or take it as cash to your account or a cheque.
The timing
Decide by maturity
The decision is yours and it is tied to the maturity date. What happens with no instructions is set by the agreement you signed.
What maturity means
Your principal comes back, with the interest it earned
A guaranteed investment certificate runs for a set term, from a few months to as long as ten years. The day that term ends is the maturity date. On that date the amount you originally put in, the principal, is yours again. A GIC guarantees you get that back, and deposit insurance protects eligible deposits if the institution itself fails.
How the interest reaches you depends on the GIC. Some pay it to you along the way, monthly, every few months, or once a year. A compound GIC keeps the interest inside and pays it together with the principal at maturity. By the maturity date the GIC has finished earning interest.
Many credit unions call these products term deposits. Everything on this page about maturity applies to both.
How the money comes back
- PrincipalReturned in full
- Simple-interest GICInterest paid through the term
- Compound GICInterest paid at maturity
The principal is guaranteed back whichever way the interest is paid.
At the maturity date
Three things you can do with the money
When the term ends you decide what happens to the money. There are three main paths, and you can combine them, renewing part and taking the rest.
- Roll it over. Invest all or part of it in another GIC, for whatever term suits you next.
- Move it to another investment. Put the money into something else entirely.
- Cash it in. Have it deposited to your account, or take it as a cheque.
Timing
The decision is tied to the maturity date
The maturity date is the deadline for your instructions. Give them before it arrives and all three options are open to you.
If no instructions are in place, what happens to the money is governed by the GIC agreement you signed when you bought it. Some agreements set a renewal as the default; others hold the funds until you act. The agreement, together with any notice your institution sends as the date approaches, is where that answer lives for your specific GIC. Reading it before maturity keeps the decision yours.
See the difference
What continuing at a weaker rate costs
At maturity the money can keep earning, and the rate it earns is a choice you make. Enter a GIC and two renewal rates: the rate you would continue at without comparing, and a rate you could get by shopping. The figures are yours to set.
Maturity value
$28,122
$3,122 interest earned
Continue 3 more years
$30,729
at 3%
Shop the rate instead
$32,091
at 4.5%
Difference
$1,362
over the next term
On $28,122 carried forward, the gap between 3% and 4.5% is $1,362 over the next 3 years.
Estimate only. It reuses the site's GIC engine and applies the rates you enter. It does not account for tax; the non-registered tax treatment is in the next section and on the GIC tax page.
Tax at maturity
Outside a registered account, the interest was taxed as it accrued
In a non-registered account, GIC interest is taxed each year, as it accrues. The Canada Revenue Agency requires the interest to be reported each investment year, even on a compound GIC that pays everything at the end. By the time the GIC matures, the only interest left to report is the final year's.
The principal coming back is your own money returned, so only the interest is taxable. A multi-year GIC has been producing that taxable interest each year along the way, with the final year landing in the year it matures.
How GIC interest is taxed, year by year and across registered and non-registered accounts, is covered in full on Is a GIC Taxable in Canada, which has a tax estimator for your province and income.
Inside a registered account
Inside a registered plan, a maturing GIC stays sheltered
When a GIC matures inside a TFSA, RRSP, RRIF, FHSA, or RESP, the maturity itself changes nothing for tax. The money stays inside the plan and you choose a new holding there.
Inside an RRSP the income stays exempt while it remains in the plan; tax applies when you take payments out, not when a GIC inside it matures. Inside a TFSA the interest stays tax-free, including on withdrawal. A maturing GIC in a RRIF still sits under the RRIF's own annual minimum withdrawal rule, which runs separately from the GIC's term. In an RESP the growth keeps building untaxed and is taxed on payout, the treatment covered on the GIC tax page.
Before vs at maturity
Non-redeemable, cashable, and redeemable GICs at maturity
The locked-in question matters most before maturity. A non-redeemable GIC is committed for the full term; taking the money out early means a penalty, and some non-redeemable GICs cannot be broken at all. A cashable or redeemable GIC can be cashed early without a penalty, often at a lower interest rate in exchange for that flexibility.
At the maturity date the distinction falls away. Whatever the type, the term has ended, the money is available, and the same three options apply.
Non-redeemable
Locked for the term; a penalty applies to break it early.
Cashable or redeemable
Can be cashed early without a penalty, often at a lower rate.
At maturity
Both reach the same point: the money is available.
Getting the most from maturity
The rate you continue at is worth shopping
Maturity is the natural moment to compare rates. Money that continues at an institution's standard posted rate often earns less than it could, and a maturing GIC is free to move, to a different term, product, or institution.
Credit union GIC rates frequently run ahead of the Big Five. A credit union is owned by its members, so the surplus its deposits generate flows back to the membership through better rates, lower fees, and community reinvestment. At maturity, comparing credit union rates is a practical way to improve the renewal rate.
Compare before you renew
Common questions
GIC maturity, answered
Get more from the renewal
A matured GIC can move to any institution, and credit union GIC rates frequently run ahead of the Big Five. Checking rates at renewal decides what you earn next.