Canadian guaranteed investment certificate (GIC) rates remain largely stagnant despite a notable rise in government bond yields over the past two weeks.
While the five-year Government of Canada yield has climbed approximately 18 basis points and the two-year yield has risen more than 10 basis points since June 24, the highest available one-year GIC rate has held steady at 3.65 percent.
The disconnect highlights a shift in how financial institutions are responding to the higher-rate environment.
Rather than passing on the increased cost of funding to GIC holders, banks and credit unions are directing their competitive efforts toward high-interest savings accounts.
This strategy allows institutions to attract deposits with more flexible terms while maintaining tighter margins on fixed-term products.
The yield curve movement comes amid heightened market volatility driven by renewed tensions in the Middle East.