TD GIC Rates Calculator
Use our TD GIC Rates Calculator to estimate the total interest and maturity value of your Guaranteed Investment Certificate. Whether you are investing in a Cashable, Non-Cashable, or Market Growth GIC, understanding your potential returns is the first step to smart saving.
Calculation Results
Understanding TD GIC Rates
A Guaranteed Investment Certificate (GIC) from TD Canada Trust is a secure investment that guarantees 100% of your original principal while earning interest at a fixed or variable rate. Unlike mutual funds or stocks, your initial investment is not subject to market volatility, making it an ideal choice for risk-averse investors.
When calculating your returns using the TD GIC Rates Calculator, several factors influence the final amount:
- Principal: The initial lump sum you deposit.
- Term: The length of time you agree to lock your money away (ranging from 30 days to 5 years or more).
- Interest Rate: The annual percentage rate (APR) offered by TD.
- Compounding: How often the interest is calculated and added back to your principal (Annually is standard for long-term GICs, while Short-term GICs often pay simple interest at maturity).
Types of TD GICs
Before using the calculator, identify which type of GIC fits your profile to input the correct interest rate:
- Non-Cashable GICs: These typically offer the highest rates but lock your funds for the full term. If you withdraw early, you may face penalties or forfeit interest.
- Cashable GICs: These offer lower rates but allow you to access your money after a waiting period (usually 30 days) without penalty.
- Market Growth GICs: Returns are linked to the performance of a stock market index rather than a fixed interest rate. (Note: This calculator assumes a fixed rate return).
How the Calculation Works
The math behind your GIC return depends on the compounding frequency.
Simple Interest (Paid at Maturity)
Common for short-term GICs (less than 1 year). The formula is:
Interest = Principal × Rate × Time (in years)
Compound Interest
Common for long-term GICs (1 to 5 years). Interest is earned on your interest. The formula is:
A = P (1 + r/n)nt
Where P is principal, r is the annual rate, n is compounding frequency per year, and t is the number of years.
Frequently Asked Questions
Are TD GIC rates guaranteed?
Yes, the interest rate on fixed-rate GICs is guaranteed for the entire term. Your principal investment is also protected, often eligible for CDIC coverage up to applicable limits.
What is the difference between annual and monthly compounding?
Monthly compounding calculates interest 12 times a year, adding it to the balance each month. This results in slightly higher total returns compared to annual compounding due to the "interest on interest" effect occurring more frequently.
Can I lose money in a GIC?
With a traditional fixed-rate GIC, you cannot lose your principal investment. It is considered one of the safest investment vehicles available in Canada.