Taggart wrote:Another year and a redemption has come up on a five year GIC. Best rate I can find in the RRIF account on another 5 year GIC to replace it is 2.710%.
However, after inflation you're down to about a 1% real return in a tax deferred or tax free account.
(FWIW inflation is currently running at 2.6%)
George is correct. I obviously got the above real return calculation incorrect. I was probably looking at the wrong figure at the Bank of Canada website.
So the real return on the above 2.710% nominal would actually be 0.09%.
I usually purchase one new 5 year GIC every spring around this time, so I don't keep track of GIC rates throughout the rest of the year.
Following are the GIC rates and redemption years for the ladder in the portfolio. These are the highest for a 5 year I could obtain at time of purchase.
2012 4.15% Just redeemed.
By the way according to the BOC, the average annual inflation rate for the last five years was 1.92%.