) for free daily and weekly newsletters, in-depth industry coverage and analysis, and access to ProStation - a powerful tool to help you manage your clients’’ portfolios.: I want to invest in a guaranteed investment certificate, but I noticed something odd when shopping for rates at my discount broker. The yields offered on one- to three-year GICs are all more than 5 per cent, but four- and five-year GICs pay less than 5 per cent.
As of Friday, Government of Canada bonds maturing in one year were yielding 4.39 per cent. Three-year bonds were yielding 3.56 per cent, and five-year bonds just 3.05 per cent. What the bond and GIC markets are predicting, essentially, is that interest rates will fall as the economy slows and the central bank wrestles inflation to the ground. That’s why you’re getting a lower, not higher, yield if you lock in a GIC for four or five years compared with a one- to three-year GIC.