GIC Laddering Strategy Explained

How a ladder works

A five-rung ladder divides the deposit into five parts placed into one-, two-, three-, four- and five-year terms. When the one-year rung matures, it can be reinvested into a new five-year term, and the pattern repeats.

After the first few years, one rung matures each year and every rung is earning a five-year rate.

A worked example

A $250,000 deposit split evenly creates five $50,000 rungs at one through five years. In year one, $50,000 matures and can be withdrawn or reinvested; the same happens each year afterwards.

The figures here illustrate the structure only. Actual rates, minimum deposits and availability must be confirmed with the issuing institution.

Trade-offs to weigh

• You get annual access to a portion of the funds, but the rest stays locked in non-redeemable terms.
• Shorter rungs typically carry lower rates than the longest term available.
• Each rung is a separate application with its own paperwork and minimum deposit.
• Splitting across issuers affects how deposit protection applies to each portion.

Building a ladder in practice

• Decide how much of the balance you can commit for the full five years.
• Check the minimum deposit for each term — a ladder needs enough per rung to qualify.
• Confirm whether registered accounts are eligible for each term you plan to use.
• Diarise every maturity date and the renewal notice deadline that goes with it.

Common questions