GIC vs high-interest savings, the trade-off
A Guaranteed Investment Certificate (GIC) locks in a fixed interest rate for a set term, from 30 days to 5 years. A High-Interest Savings Account (HISA) pays a variable rate and lets you withdraw anytime. Both are insured up to $100,000 per institution by CDIC (or by the equivalent provincial credit union deposit insurance corporation). GIC rates are usually higher than HISA rates in exchange for locking up your money. Cashable GICs split the difference: lower rate, breakable.
You have $20,000 you might need in 18 months for a wedding. A 12-month GIC pays 5.0% non-redeemable, that is $1,000 of interest. A 4.5% HISA pays roughly $900 over the same period and stays liquid. If you are 95% sure you do not need it in the next 12 months, the GIC is worth the small premium. If there is any chance you need it sooner, the HISA spares you the breakage penalty.
Keeping your emergency fund in a 5-year GIC chasing the highest rate. The whole point of an emergency fund is being available the day you lose your job, not 4 years and 11 months from now. Use a HISA or a 30-day cashable GIC ladder.
A 60-second lesson on this, with a worked drill, lives inside the Finlo app. Free, forever, on the basics.