Guaranteed Investment Certificates (GICs) in Australia: 2025 Guide

As interest rates fluctuate and market volatility persists in 2025, Australian savers are searching for safe, predictable ways to grow their wealth. One product that’s piqued curiosity is the Guaranteed Investment Certificate (GIC)—a staple in Canadian banking, but increasingly relevant to Aussies looking for secure, fixed-term investments. But what exactly are GICs, and how do they compare to familiar Australian options like term deposits?

What Is a Guaranteed Investment Certificate (GIC)?

GICs are fixed-income investment products, most commonly issued by Canadian banks. When you buy a GIC, you agree to lock away your money for a predetermined period—anywhere from 30 days to 5 years or more—in exchange for a guaranteed interest rate. At maturity, you receive your original deposit plus the promised interest, regardless of how the broader markets perform.

• Principal is protected: Your initial investment is guaranteed by the issuer.

• Interest rates are fixed: You know exactly how much you’ll earn.

• Terms are flexible: Choose from short-term (as little as 1 month) to long-term (up to 10 years) options.

GICs are most popular in Canada, where deposits up to CAD $100,000 per institution are insured by the Canada Deposit Insurance Corporation (CDIC). However, with global financial products becoming more accessible, some Australian banks and fintechs are exploring GIC-like offerings, especially for expats or investors with Canadian ties.

How Do GICs Stack Up Against Australian Term Deposits?

For most Australians, the closest equivalent to a GIC is the humble term deposit. Both products share several features:

• Require you to lock in funds for a set period

• Pay a fixed interest rate, often higher than standard savings accounts

• Offer government-backed deposit guarantees (up to $250,000 per institution in Australia via the Financial Claims Scheme)

However, there are key differences:

• Currency risk: GICs are denominated in Canadian dollars, so Australians investing directly face exchange rate fluctuations.

• Availability: GICs are not widely offered by Australian banks, but some global platforms and specialist financial advisers facilitate access for eligible investors.

• Interest rates: As of early 2025, Canadian GIC rates hover around 3.5–5% p.a. for 1–5 year terms, while Australian term deposits range from 4–5% p.a. for similar terms, depending on the institution and deposit size.

• Taxation: Interest earned on foreign GICs is generally taxable in Australia; double-check with a tax professional for specific implications.

Who Should Consider GICs in 2025?

GICs may be suitable for:

• Australian expats or citizens with Canadian residency or family ties

• Investors seeking diversification across currencies and geographies

• Those prioritising capital preservation and guaranteed returns over high growth

Realistically, most Australians will find local term deposits more convenient and equally secure. However, for globally-minded investors, or those planning to spend time in Canada (such as students or retirees), GICs can offer competitive rates and rock-solid safety.

In 2025, the Canadian government continues to require international students to purchase a GIC as proof of funds for visa applications—typically CAD $20,635. This ensures students have secure access to living expenses upon arrival, and the funds are gradually released throughout their study period.

Risks and Watch-Outs

While GICs are among the safest investments available, there are still some factors to consider:

• Lack of liquidity: Withdrawing funds before maturity usually incurs penalties or lost interest.

• Inflation risk: Fixed rates mean your real returns could be eroded if inflation spikes.

• Currency risk: For Australians, a falling Canadian dollar can reduce your eventual returns when converting back to AUD.

• Access barriers: Not all Australian investors will qualify for GICs, and the paperwork can be more complex than for local term deposits.

The Verdict: Are GICs Right for You?

Guaranteed Investment Certificates are a tried-and-true vehicle for safe, predictable returns—especially for those with cross-border needs or a preference for Canadian financial products. For most Australians, however, the local term deposit remains a simpler, equally secure way to earn fixed interest in 2025.

As with any investment, compare rates, terms, and guarantees before locking away your savings. And if you’re considering GICs for study, immigration, or diversification, ensure you understand the tax and currency implications.