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Annuities vs GICs: Proof that Annuities are Better than GIC's


ivon t hughes

February 13, 2014



Ivon T Hughes




The best GIC interest rates are under 3% for a five year term in 2014.


With GIC interest rates at record lows, it's tough to make your investments generate the income you need. To get the most from your money, you have to make the smartest investments you can as GIC interest is fully taxable.


But income from non-registered annuities is only partially taxable.



Current GIC Rates as of February 13, 2014

Company 5 Year Term
Achieva Financial 3.000
B2B Bank 2.500
Bank West 1.850
Bank of Montreal 1.950
Bank of Nova Scotia 1.750
CIBC 1.500
Caisses Desjardins 1.750
Canada Life 1.400
Canadian Western Bank 2.500
Effort Trust 2.600
Empire Life 2.200
Great-West Life 1.650
HSBC Bank Canada 1.950
Home Trust Company 2.550
ICICI Bank Canada 2.650
ING Direct 2.550
Industrial Alliance 1.950
Laurentian Bank Canada 1.750
Laurentienne Trust 1.750
London Life 1.650
Manulife Bank 2.450
Manulife Investments 2.250
Manulife Trust 2.450
National Bank 1.750
Outlook Financial 3.100
Peoples Trust 2.300
President's Choice Fin'l 2.500
Royal Bank of Canada 2.200
Standard Life 2.275
Sun Life - Insurance 2.300
Sun Life - Trust 2.650
T-D Mortgage 2.300


Compare annuity payments to GIC payments


For conservative investors, GICs are a time-tested favorite for providing income. But many people have discovered that annuities offer better monthly income and are designed to provide that income for your lifetime.

So which investment is the smarter way to get the income you need?

GICs are among the safest investments available, as they're insured up to $100,000.

Alternatively, income from annuities is greater and insured up to $2000 a month by Assuris.


Annuity vs GIC Table: Annuity vs GIC Table



Why is an annuity better?

Annuities come with some other benefits as well. Unlike GICs, annuities generate lifetime income; you can never outlive it. 


Annuity vs GIC Chart:

Annuity vs GIC Chart



Which should you pick?

Whether a GIC or an annuity is smarter for you depends on your specific financial needs. The key in deciding is to understand that, despite looking similar, GICs and annuities are very different.


Make sure you know the difference between an annuity and a GIC.  You should go over all the benefits of an annuity with a professional advisor and see if an annuity is best for you.


If you currently have a GIC, we would be happy to review it for you to ensure that it is providing you with the best benefits available today.


Annuity vs GIC Excel Spreadsheet

Free Download:



About the Author:

Ivon T Hughes is a leading expert in life annuities in Canada. His website is a recognized authority on Canada annuities. He's also an established insurance and investment broker, licensed across Canada through The Hughes Trustco Group since 1972. Recently, he's been redefining how annuities are sold in Canada.

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