The Best Bank of Montreal GIC Rates in November 2024

ByDan Kent Published On:

When considering investment options, a Guaranteed Investment Certificate (GIC) offered by the Bank of Montreal (BMO) stands out due to the guarantee of your principal with a major Canadian institution. 

Much like other major banks like Scotiabank, Royal Bank, and CIBC, BMO is expanding its product suite of GICs to compete with online banks like Equitable Bank.

I’d argue that BMO has the most comprehensive and interesting suite of GIC products among major Canadian banks, and although they may not have the best rates when compared to digital banks, some like their products to be with a major institution.

GICs are a popular choice for Canadians looking to preserve their principal while earning a fixed rate of return. They’ve become even more popular now as interest rates have gone up significantly in the last few years. They’re Canada Deposit Insurance Corporation (CDIC) covered up to $100,000, insuring your money is safe.

The interest rates for BMO GICs vary depending on factors such as the length of the investment term and whether the investment is held within a registered plan like an RRSP.

Offerings can include short-term GICs with terms as brief as 30 days to long-term options extending up to 10 years. Longer-term GICs generally provide higher interest rates, as your money is locked in for a longer period of time, and the bank pays you a premium for this.

Let’s go over the Bank of Montreal’s best GIC rates.

Current BMO Bank of Montreal GIC Rates

The Bank of Montreal (BMO) offers a variety of Guaranteed Investment Certificates (GICs) to cater to different investment goals, with options ranging from short-term GICs for those looking for flexibility to long-term GICs designed for higher returns over specific periods.

Short-term BMO GIC rates

BMO’s short-term GICs, often called BMO Short-Term Investment Certificates, typically mature in 30 days to just under one year. Typical deposit minimums are around $1000, making them accessible to any investor. 

They also have redeemable options for investors who want a little more liquidity. The bank’s short-term options are suitable for investors seeking somewhere to put capital that they will eventually need over the short term. 

Their rates don’t quite keep up with many of the smaller banks. However, they’re still competitive. 

Long-term BMO GIC rates

For those willing to commit for longer periods, BMO’s long-term GICs may present an opportunity for higher returns. These financial products lock in funds for periods from one year up to five years, often featuring higher interest rates as the term length increases. They also often pay their interest semi-annually.

However, this isn’t always the case, as the bank will typically make their interest rates based on where they expect policy rates to go in the future. Their longer-term GICs have a lower minimum investment than their short-term ones, and for the most part, they will be non-redeemable. However, you can find some cashable GICs with this term length.

Special GIC rates

BMO periodically offers special GIC rates that may provide additional value to investors. These special rates are usually promotional and come with their own set of terms and conditions.

They also have a few unique GICs that allow investors to get exposure to the stock markets while guaranteeing their principal amount. Along with this, the company has GICs you can buy in USD.

  • Market-Linked GICs: Potential for returns linked to market performance. BMO calls them their BMO Canadian Market GICs
  • USD GICs: GICs available in US dollars
  • BMO RateRiser Max GIC: A GIC that offers a guaranteed increase in interest rates
  • BMO Air Miles GIC: A GIC product that allows you to earn Air Miles
  • BMO RateOptimizer Max GIC: A GIC that allows you to take advantage of a GIC laddering strategy

How to buy a GIC with the Bank of Montreal

Step 1: Choose the type of GIC

Investors must first decide on the type of GIC that aligns with their saving and investing goals. The Bank of Montreal offers a range of GICs, including those that are redeemable—providing the flexibility to access funds before the maturity date—and non-redeemable GICs, often yielding higher interest rates. 

In addition to this, you could utilize a market-linked GIC that can allow you to protect your principal plus gain exposure to the stock markets. Just keep in mind that these products are almost always more beneficial to the bank as they will cap performance, and it’s very important to discuss and read the terms of the GIC first.

Assessing the differences between short-term investment options and long-term investment solutions is crucial to accommodate individual needs and preferred term lengths.

Once you’ve done this, you can figure out the account you’d like to buy it in.

Step 2: Select the account you’d like to buy the GIC in

After selecting the appropriate GIC, investors need to choose the account for their investment. It might be a Tax-Free Savings Account (TFSA) GIC to save on taxes while growing the balance or a Registered Retirement Savings Plan (RRSP) GIC for tax mitigation until withdrawal. 

The selected account will affect the GIC’s taxation and may impact the maturity date and returns. GICs held in tax-sheltered accounts like the TFSA, RSP, RRIF, RESP, RDSP, or even FHSA are called registered GICs, whereas ones held in taxable accounts like a cash or margin account are called unregistered GICs.

Step 3: Buying the GIC

If you don’t already have a BMO account, you’ll need to create one. This can typically be done online via the BMO website or by visiting a local branch. You’ll need to provide personal identification, like your social insurance number, and possibly other documentation as required by the bank. 

Once your account is set up (or if you already have one), log in through the BMO app or desktop website. If you’re using the app, download it from your device’s app store. For desktop access, navigate to the BMO website and find the login section. 

In your account dashboard, look for the investment section. Here, you should find options for purchasing GICs. This section will provide various GIC products that BMO offers. 

Before proceeding, make sure to read and understand the terms of the GIC. This includes the interest rate, maturity date, minimum investment, whether or not it is redeemable, whether it is linked to a market index, etc.

Decide on the amount you wish to invest. Keep in mind the minimum deposit requirement for the chosen GIC. Finally, complete the transaction by following the prompts in the app or on the website. This will usually involve confirming the details of your GIC and authorizing the transfer of funds from your BMO account to the GIC. 

Alternative fixed-income products from the Bank of Montreal

Investors seeking diversity beyond traditional Guaranteed Investment Certificates (GICs) have various options with the Bank of Montreal (BMO). 

For one, they have a very popular money market fund called the BMO Money Market Fund ETF Series. It trades under the ticker ZMMK, and you can buy it inside your brokerage account, much like a stock, as it trades on the TSX.

This money market fund will expose you to a variety of savings-based investments, like treasury bills, high-interest savings deposits, and more.

BMO is the frontrunner here in Canada for ETF-related products, and as a result, it has way too many for me to speak on here. In terms of fixed-income funds, you’ll find nearly 100 that suit your goals, and they can range from government to corporate bond funds to US treasury bill funds.

In my opinion, the Bank of Montreal leads the pack when it comes to alternative fixed-income products outside of GICs. Many of them have the liquidity of a stock as they trade as ETFs. Buying fixed income just isn’t difficult anymore with BMO.

Should you be buying GICs right now?

In the realm of investments, Guaranteed Investment Certificates (GICs) stand out as a secure financial product offered by major banks and credit unions in Canada. They provide a guaranteed return on investment over a fixed term, which can appeal to those averse to the volatility of stocks, ETFs, and bonds.

Given the rising interest rate environment as a result of adjusted market conditions, GICs could be considered a more attractive option for securing stable returns, especially when the yields on high-interest savings accounts may not be keeping pace with inflation.

However, it is very important that you first understand your own financial goals. a GIC could be the perfect product for one investor and a horrible one for another. If you’re unsure, it never hurts to contact an investment advisor or planner.

Mutual funds, ETFs, stocks, and other market-linked investments might offer higher potential returns but come with increased risk, making them better options over the long-term but not so wise decisions with short-term capital you may need in the near future.

One must also consider liquidity needs. GIC funds are locked in for the chosen term, and early withdrawal might come with penalties, whereas funds in savings accounts are generally more accessible.

This table below highlights some of the different risks/rewards.

Investors considering GICs should assess their financial goals against the backdrop of their individual risk tolerance and the economic landscape. While GICs offer a safe harbour, one’s portfolio should be diversified to balance security, liquidity, and growth potential. Best GIC rates