Hello. I have some of my money in GICs. I usually purchase the ones with a one-year term, and I go for the best rate, of course. You know how interest rates change all the time, and I have a thought to take advantage of this. Why don't I purchase GICs with monthly payout instead of yearly? This way, it gives me more flexibility. When the interest rate goes up, I can cash my old GIC and since it has already given me a few months' worth of interest payment, I don't lose too much. And I will then buy the higher-yielding GIC. I know that with these monthly GICs, their rate of return is slightly lower, however I have compared the GIC rates for both TD and RBC and honestly the difference isn't very big. For example, RBC's equitable bank GIC has a return of 5.46% per year for the annual one, and the rate is 5.37% per year for the monthly one. The difference is very small, as you can see.

Do you guys think this is a good strategy? Thanks.

This post was edited by JessiWan on Jul 19 2023 07:41pm

Monthly imo

For accounts I need to maintain liquidity in and keep the principal balance secure, I personally use 60 day GIC's that are redeemable. Sometimes 90 day. Really depends on short term cashflow needs.

This post was edited by SBD on Jul 20 2023 10:11am

If your goal is to have access to liquidity, an ETF like cash or PSA might be a good fit, you can sell whenever you want and those etf behave like a high yield interest account

Also if you live in Canada, those etf yield more after tax in a non registered account because gic interest are considered as an income and not a capital gains