WealthONE offers Canada's highest five-year GIC rate at 4.55 per cent

Guaranteed investment certificate rates in Canada have risen across the board. WealthONE currently provides the highest five-year rate at 4.55 per cent, an increase from 4.00 per cent six months ago. The same institution also leads the market for two-, three- and four-year terms with rates of 4.30 per cent, 4.40 per cent and 4.45 per cent respectively. Those two- and three-year rates were at 3.80 per cent as recently as April. For one-year GICs, Haventree Bank offers the top rate of 4.00 per cent.

Promotional savings account rates remain competitive, with BMO offering 5.00 per cent for 120 days. Servus Credit Union in Alberta matches that rate but only for 90 days on new deposits of at least $5,000, provided an account is opened by Oct. 31. Other credit unions are also offering short-term promotions, including Steinbach Credit Union in Manitoba at 4.60 per cent for four months and Ontario's WFCU at 4.56 per cent for four months. These accounts provide more flexibility than GICs, though their raised rates are temporary and often have eligibility rules.

Standard savings account rates have held steady. WealthONE offers a flat 3.00 per cent on its RRSP savings account. Its non-registered savings account uses a tiered structure, paying 2.60 per cent on balances under $10,000, 2.75 per cent on balances between $10,000 and $24,999, and 3.00 per cent on amounts of $25,000 or more. Manulife provides a rate of 3.00 per cent for two years on net new deposits of up to $500,000 into newly opened non-registered accounts.

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The rise in GIC rates comes as Canada's annual inflation rate edged up to 3.1 per cent in September from 3.0 per cent in August. Statistics Canada reported the increase was largely driven by gasoline prices, which jumped 27.8 per cent. Underlying inflation pressures softened, however, with the Bank of Canada's preferred core measures declining. This inflation erodes the real return on savings, meaning an account paying 3.00 per cent loses purchasing power after inflation and before taxes.

Financial markets are anticipating another interest rate increase from the Bank of Canada at its upcoming meeting on Oct. 28. Persistent inflation could push short-term GIC rates higher in the near future. Longer-term five-year GIC and fixed mortgage rates are more influenced by bond yields, which may have already factored in expected rate hikes. For savers, this creates a decision between locking in current rates for certainty or waiting for potentially higher returns if inflation continues and GIC rates climb further.

With files from The Globe and Mail