GIC monthly interest payout | GIC discussions | Discussion forum

I know CIBC pays monthly and doesn't reduce interest rate .
2 caveats, term must be > 1 yr and age must be => 60 according to my finrep at cibc.

Peoples Trust (and Peoples Bank) set up monthly-pay GICs for me last week. Ally (sadly gone), VanCity, Scotia have done it over the years, and other places, too, though I'd have to root around in records to find where.

Most of my term deposits are monthly-pay because that gets me a bit of extra cash as one goes along, making laddering and cash-flow more flexible and granular. The exceptions are where I expect rates to be dropping and want to freeze in the higher rate.
RetirEd.

One can think of monthly payout as getting the amount of one year's interest as a 1-year deposit at the rate of a five-year.
RetirEd

hwyc said
OTR Peoples do not have the option for GICs to payout monthly. I tried to apply for one to no avail.  

I was just going to phone them are you sure they don't ? How can someone above say they do and did it or did you get a clueless CSR

Serious question. I haven't bought a GIC in years but probably going to pull the trigger after next BofC meeting and purchase 1 or 2 year GIC. My question is, if I purchase, lets say a 2 year, non redeemable GIC. Do they send me a T5 slip for the interest that is earned every year even though I might decide to roll over the interest until the maturity of the 2 years or will I just get the slip at the conclusion of the 2 years? Much appreciated.

Also, how do I start my own topic for discussion easily? Thanks. GL

A T5 should be issued after each anniversary year.

You got it, here's from the horse's mouth.........

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12100-interest-other-investment-income/line-12100-bank-accounts-term-deposits-guaranteed-income-certificates-gics-other-similar-investments.html

That's correct: One is deemed to receive interest on each anniversary date, regardless of the terms of the GIC.

That is done to thwart sophisticated taxpayers from buying something like a 10-year strip bond to defer taxes on the interest for ten years.

Norman1: I confess to not having read up about this, but is all the year's interest from payments during the year deemed income at the anniversary date, or would shorter payout periods (such as monthly or those off boutique ones with 8+8 months) deemed to be paid at time of crediting? I think it wouldn't affect taxes, as the total would only be reported to CRA when the T5 was issued, right? Or am I missing some circumstance where it would make a differerence?
RetirEd

savemoresaveoften said

On top if I remember correctly, the first T5 will be at least after the 1st anniversary date. For example, a new GIC purchase on Jul 1, 2022 will not be issued a T5 for 2022. Rather the 2023 T5 will include 18 months of interest, whether the interest is reinvested or paid out is irrelevant.  

If the GIC is two years plus then it appears CRA rules as per post #14 indicates that the T5 issued will be for the first 12 months in 2023 not 18 months, the last six months of 2022 will be reported the following year.
Relevant portion "For example, if you made a long-term investment on July 1, 2020, report the interest that accumulated up until the end of June 2021 on your 2021 return even if you do not receive a T5 slip. Report the interest from July 2021 to June 2022 on your 2022 return."