We’re talking about 5 per cent returns on savings and investing products with minimal or virtually zero risk of losing money. At 5 per cent, you’re comfortably above inflation, and not much below the average annual return of a balanced portfolio after fees. Five per cent returns look less appealing on an after-tax basis in non-registered accounts, but you can fight back by using a tax-sheltered registered account.
Outlook: One-year GIC rates appear to have some stickiness for now, but that could change if the Bank of Canada cuts its overnight rate or inflation suddenly falls hard.Several alternative banks offer 5 per cent or a bit more for two years, but you’ll have to deal with them directly. Online brokers have little to nothing at 5 per cent or more in their inventories for people looking to lock up money for two years. The best two-year rate at one broker was 4.94 per cent.