A $10,000 GIC at 4% for three years is worth $11,248.64 at maturity when interest compounds yearly. Enter your own amount, rate and term below to see the value and the interest you’d earn, before any tax.
Why do two GICs at the same rate pay differently?
Because the interest type matters. Simple interest is paid once, at the end, on your original deposit. Compound interest joins the balance at each period, and the next period earns on the bigger sum. The table uses $10,000 at 4% for three years.
| Interest type | Interest earned | Value at maturity | Effective yearly rate |
|---|---|---|---|
| Simple, paid at maturity | $1,200.00 | $11,200.00 | 4.00% |
| Compounded yearly | $1,248.64 | $11,248.64 | 4.00% |
| Compounded twice a year | $1,261.62 | $11,261.62 | 4.04% |
| Compounded monthly | $1,272.72 | $11,272.72 | 4.07% |
Simple versus monthly is a gap of $72.72 over three years. Not a fortune, but more than a few bucks. And it grows with a longer term and a bigger deposit. Stretch the same $10,000 to five years and the gap between simple ($2,000 of interest) and monthly compounding ($2,209.97) is $209.97, nearly three times as much.
What does a $25,000 five year GIC earn?
Say Priya in Winnipeg puts $25,000 into a five year GIC at 3.5% with yearly compounding. The calculator shows $29,692.16 at maturity, which is $4,692.16 of interest. The effective yearly rate matches the quoted 3.50%, since compounding happens once a year. At simple interest the same money would earn $4,375, so compounding adds $317.16 over the term.
When you compare offers, use the effective yearly rate, not the headline rate. A GIC at 3.5% that compounds monthly shows a slightly higher effective rate than one that compounds yearly at 3.5%.
Is GIC interest taxed?
Yes, if you hold it outside a TFSA or an RRSP. You report it as income every year, even when the GIC pays only at maturity. The CRA’s page on line 12100, interest and other investment income explains that interest earned in each complete investment year of a compound GIC goes on that year’s return, and that you still report it if no T5 slip shows up because the total was under $50.
The calculator shows interest before tax, so in a taxable account your gain after tax will be lower. Inflation isn’t in the numbers either, and a 4% GIC doesn’t add 4% of buying power when prices rise by about the same amount. Saving for something specific, like a down payment? Set the target and test several terms until the maturity value gets there.
Can you cash in a GIC early?
Sometimes, and it depends on the product. Many GICs are locked until maturity, while a cashable one lets you out sooner, usually at a lower rate. Before you buy, the lender has to tell you whether early cashing in is allowed and what it does to your interest, as the Financial Consumer Agency of Canada explains in its guide to GICs and term deposits. If you might need the money in a year or two, ask that question first.
Also worth a minute: CDIC deposit insurance covers eligible deposits, GICs included, up to $100,000 at a member institution.
What the estimate can’t tell you
It holds one rate for the whole term and assumes no early cash in. A product that resets its rate or lets you redeem early follows its own terms, so read the contract. For registered accounts, the TFSA calculator shows how room and growth work. To see growth with regular deposits, use the compound interest calculator, and for a plain interest figure on any loan or deposit try the interest calculator.
Where this information comes from
You can trace every figure to the formulas in the calculator, and you can check them by hand. Simple interest multiplies the deposit by the rate and the years, and compound interest applies the growth formula once per period. We don’t store any rates, because GIC rates change by lender and by term. Results are estimates, and this website has no connection with any government body.
About this calculator
- What it does
- Work out the value of a GIC at maturity with simple or compound interest.
- Category
- Savings, Interest and Budget
- Last checked
- September 30, 2026
- Result type
- Estimate for information only, not tax advice.
Frequently asked questions
What does $10,000 earn in a GIC at 4% over three years?
With yearly compounding it grows to $11,248.64, so $1,248.64 of interest. With simple interest paid at maturity it grows to $11,200.00.
How do simple and compound interest differ on a GIC?
Simple interest is figured on the amount you put in and nothing else. Compound interest is added to the balance each period, so later interest is earned on earlier interest.
Why is the effective yearly rate higher than the rate I was quoted?
Compounding more often adds interest sooner. A 4% rate compounded monthly works out to an effective 4.07%.
Do I pay tax on GIC interest?
Yes, if the GIC sits outside a TFSA or an RRSP, the interest is taxable income each year. The calculator shows it before tax.
What should I compare when choosing between two GICs?
The effective yearly rate, shown under the result. It puts different compounding schedules on one scale, so a 4.07% offer beats a 4.04% offer over the same term.
Sources and updates
Updated: . How we check rates · Editorial team · Updates