Rates verified Oct 2026 · Sources: CRA, Service Canada
Example$5,000 lump sum · 5-rung ladder (1-5 years) · TFSA · reinvest into new 5-year GICs
Example: a $5,000 lump sum split evenly across a 5-rung ladder (1 through 5 years), with each maturing rung reinvested into a new 5-year GIC, grows to about $6,036 after 5 years at illustrative Oct 2026 rates - versus about $6,010 for a single flat 5-year GIC over the same period. Edit the amount, number of rungs, and rates below to model your own numbers.
| Year | Matures this year | Ladder value (mark-to-market) |
|---|---|---|
| 0 | - | $5,000 |
| 1 | $1,043 | $5,199 |
| 2 | $1,084 | $5,401 |
| 3 | $1,123 | $5,606 |
| 4 | $1,163 | $5,818 |
| 5 | $1,202 | $6,036 |
Instead of locking all your money into one term, you split it across several terms (e.g. 1 through 5 years).
Each year, one rung matures. You reinvest it into a new long-term GIC (usually 5 years), keeping the ladder going.
This gives you yearly access to some cash without giving up the higher rates longer terms usually pay.
Interest earned inside a TFSA is completely tax-free and does not use up any extra TFSA contribution room beyond your original deposit.
A non-redeemable 5-year GIC is locked for the full term - plan your ladder so you're not relying on that specific rung for near-term cash needs.
If you withdraw at maturity, that contribution room is restored starting the following calendar year (January 1).
Example: $7,000 at 3.75% for 5 years, compounded annually, grows to about $8,415 - all of it tax-free inside a TFSA.
CDIC covers eligible deposits (including GICs, in CAD or foreign currency) at member banks and trust companies, with no term-length limit on coverage.
Rates as of Oct 2026, illustrative only - confirm current rates with your institution. Not financial advice.
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This GIC ladder calculator shows exactly how a laddered GIC strategy plays out year by year: a $5,000 lump sum split across 3 to 5 rungs, each maturing one at a time and reinvesting into a new 5-year GIC, versus keeping the same money in a single flat 5-year GIC.
The lump sum (and any annual top-up) is split evenly across the chosen number of rungs (1 through N years). Each rung compounds annually at its term's rate. When a rung matures, its full value rolls into a new 5-year GIC at the then-current 5-year rate. The chart and table show the ladder's total mark-to-market value at the end of each year, using today's rates held flat for the projection.
Rates shown are illustrative defaults, not live quotes - confirm current rates with your institution. GICs held in a TFSA or RRSP earn interest tax-free or tax-deferred; held outside those accounts, interest is taxed as income in the year it's earned. CDIC covers eligible GIC deposits up to $100,000 per depositor per category, with no term-length limit.
Splitting $5,000 evenly across a 5-rung ladder (1 through 5 years), with each maturing rung reinvested into a new 5-year GIC, grows to roughly the same range as a single flat 5-year GIC over 5 years, with less of your money locked up at any one time. The exact dollar figure depends on current rates - use the calculator above with today's rates for your own number.
A GIC ladder divides your investment across multiple GICs with staggered maturity dates (e.g., 1, 2, 3, 4, and 5 years). As each rung matures you reinvest at the prevailing rate. This reduces reinvestment risk - you are never fully locked into a single rate for your entire balance - while still capturing most of the yield that longer terms pay.
A 5-rung ladder (1 through 5 years) is the most common setup and gives you access to one maturing rung every year. A 3-rung ladder (1-3 years) suits people who want more frequent access to cash, at the cost of a lower average yield since more money sits in shorter terms.
No. Interest earned inside a TFSA is tax-free and does not count against your contribution room - only your original deposit does. If you withdraw the GIC at maturity, that withdrawal amount is added back to your TFSA room starting January 1 of the following year.