GIC Laddering

This calculator compares a laddered GIC strategy to investing in 1 year GICs.
GIC laddering is a strategy of purchasing GICs with different maturity dates and interest rates to help maximize returns, increase liquidity and reduce reinvestment risk.

Instead of investing $25,000 in a single GIC, break it up so that $5,000 each is invested in five GICs with different terms of 1 through 5 years. When the first term matures after 1 year, renew it into a five year GIC. When the second term matures, renew it for five years and so on.

Amount invested
25,000
Term 1 Year 2 Year 3 Year 4 Year 5 Year
Interest rate
1.00%
1.25%
1.50%
1.75%
2.00%

Laddered GICs
Initial
Investment
 
Today
 
Year 1
 
Year 2
 
Year 3
 
Year 4
 
Year 5
$5,000 Purchase 1 Yr
GIC @ 1.00%
and invest
$5,000
Purchase 5 Yr
GIC @ 2.00%
and invest
$5,050.00
$5,000 Purchase 2 Yr
GIC @ 1.25%
and invest
$5,000.00
- Purchase 5 Yr
GIC @ 2.00%
and invest
$5,125.78
$5,000 Purchase 3 Yr
GIC @ 1.50%
and invest
$5,000.00
- - Purchase 5 Yr
GIC @ 2.00%
and invest
$5,228.39
$5,000 Purchase 4 Yr
GIC @ 1.75%
and invest
$5,000.00
- - - Purchase 5 Yr
GIC @ 2.00%
and invest
$5,359.30
$5,000 Purchase 5 Yr
GIC @ 2.00%
and invest
$5,000.00
- - - - Purchase 5 Yr
GIC @ 2.00%
and invest
$5,520.40
$25,000


Total Interest
 
Year
Laddered
GICs
1 Year
GICs
Laddered
Advantage
After 5 Years $2,332.31 $1,275.25 $1,057.06
After 10 Years $5,177.07 $2,615.55 $2,561.52

Using laddered GICs would provide you $1,057.06 more after 5 years and $2,561.52 more after 10 years than using 1 year GICs

Investment Value



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