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
(max. $5,000,000)
|
25,000
|
| 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 |
|
Total |
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 |
Results
Investment Value
Disclaimer
