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What is an Iron Condor?

An Iron Condor is an advanced options trading strategy designed to profit when an underlying asset trades within a defined price range. An iron condor combines both sides of the options chain: it is built from a bear call spread on the upside and a bull put spread on the downside. This market-neutral, limited-risk, limited-reward structure is a volatility-based strategy that benefits from time decay.

Structure of an Iron Condor

An iron condor consists of four option contracts with the same expiration date. It is typically executed as a single “complex order” to ensure all legs are filled simultaneously at a fixed net credit. It is constructed by combining a bear call spread and a bull put spread:

What is a Bear Spread?

A bear spread is an options trading strategy designed to profit from a moderate to large decline in the price of an underlying asset. Like other options spreads, a bear spread involves simultaneously buying one option and selling another of the same type (either puts or calls), with the same expiration date but different strike prices. This creates a defined risk/reward profile — both profit and loss potential are capped.

What is a Bull Spread?

A bull spread is an options strategy designed to profit from a moderate to large price rise while capping both potential gains and losses. The strategy involves buying one option and selling another of the same type (calls or puts) with the same expiration but different strikes. This structure creates a defined risk-reward profile: profit is limited, but so is risk.

This strategy suits a neutral to moderately bullish outlook. Selling the second option significantly reduces the trade’s cost compared to buying a single option.

Best Canadian GIC Rates in 2026

As we enter 2026, Canadians looking to grow their savings with guaranteed returns have plenty of opportunities in the GIC market. With interest rates stabilizing and financial institutions competing for deposits, now is a great time to review the best available rates and maximize your registered account contributions.

2026 TFSA and FHSA Contribution Limits

Before diving into rates, here’s a quick reminder of this year’s contribution limits for tax-advantaged accounts:

How Are GIC Returns Taxed in Canada

GIC interest earned in non-registered accounts is taxed as regular income—100% of the interest is added to your taxable income for the year. This makes understanding the tax rules important for maximizing after-tax returns.

The good news: GICs held in registered accounts like TFSAs, RRSPs, and FHSAs are either tax-free or tax-deferred, meaning you don’t need to report this income on your tax return.

The T5 Slip

When you earn investment income from a GIC in a non-registered account, your financial institution will issue a T5 Statement of Investment Income slip. This slip reports the interest you earned during the calendar year.

Why Investors Should Open an FHSA Even If They Don't Think They Need One

Many Canadians believe the First Home Savings Account (FHSA) is only for active house hunters. However, waiting until an investor is “ready” to buy is often a strategic mistake.

The FHSA offers a unique combination of tax benefits—tax-deductible contributions (like an RRSP) and tax-free withdrawals (like a TFSA). But these benefits are strictly limited, and investors must close the account within 15 years of opening it (or by age 71, whichever comes first).

The Opportunity Cost of Exceeding Minimum OSAP Repayments

When repaying an Ontario Student Assistance Program (OSAP) loan, borrowers face a critical decision: should they pay more than the minimum required amount, or invest those extra funds elsewhere? Understanding the opportunity cost—the potential benefits forgone by choosing one option over another—is essential for making informed financial decisions.

Understanding OSAP Repayment Structure

OSAP loans consist of two components: a federal portion (Canada Student Loan) and a provincial portion (Ontario Student Loan). As of April 1, 2023, the Government of Canada has permanently eliminated interest on all Canada Student Loans, making the federal portion interest-free (0%). However, the Ontario portion continues to accrue interest at a rate of prime rate plus 1%.

How to Identify GIC Scams

GICs are popular investments in Canada, offering secure, predictable returns backed by deposit insurance. However, fraudsters increasingly target GIC investors through sophisticated scams, including fake websites that impersonate legitimate financial institutions. The Canadian Investment Regulatory Organization (CIRO) has issued multiple alerts about fraudulent websites impersonating registered firms and promoting non-existent GIC offers.

In a February 2025 case, an 82-year-old man from Oakville lost $750,000 after investing through a fraudulent website that impersonated PC Financial, using fake documents and impersonating real employees to deceive the victim.

Read more →

Should Investors Buy GICs from Credit Unions?

Credit unions usually offer superior GIC rates when compared to traditional banks, while also providing unique benefits like profit sharing and enhanced deposit insurance. Unlike banks, which are for-profit corporations accountable to shareholders, credit unions operate as not-for-profit, member-owned cooperatives. Instead of paying dividends to external investors, they return earnings to members through higher interest rates, lower fees, and improved services.

Benefits of Using a Credit Union

Higher Interest Rates

The cooperative structure allows credit unions to offer highly competitive GIC rates. For example, as of December 28, 2025, Saven Financial offers a 5-year non-redeemable GIC at 3.80%, significantly outpacing typical big bank rates such as RBC which only offers 3.00%.

Cashable vs Redeemable GICs

Cashable and redeemable GICs are both designed to offer investors early access to their funds before maturity—a key advantage over non-redeemable GICs, which lock in principal for the entire term. However, the terms “cashable” and “redeemable” are not standardized across the industry; financial institutions often use them interchangeably.

Despite the confusing terminology, these products are intended to serve two distinct intentions. Understanding the theoretical difference between them helps navigate the fine print of actual bank products.

What is an Escalator GIC?

An Escalator GIC (also known as a Rate Riser or Step-Rate GIC) is a type of guaranteed investment where the interest rate increases each year of the term, typically 3 to 5 years. Unlike a standard fixed-rate GIC that pays the same rate every year, an escalator GIC rewards investors for keeping funds invested longer with progressively higher rates.

How It Works

The financial institution guarantees a specific interest rate for each year, with rates increasing annually. While there is a stated term, Escalator GICs allow withdrawals on the investment’s anniversary date.

What is GIC Laddering?

GIC laddering is an investment strategy that involves dividing a total investment across multiple Guaranteed Investment Certificates with staggered maturity dates. Instead of locking all funds into a single term, the investment is spread across several terms—typically one through five years. This approach balances the pursuit of higher returns with regular access to funds and protection against interest rate fluctuations. When people refer to “GIC laddering,” they typically mean a rolling ladder strategy, where maturing GICs are continuously reinvested into new long-term GICs.

What are Market Growth GICs?

Market Growth GICs are hybrid instruments combining principal protection with exposure to equity markets. Unlike fixed-rate GICs, returns are contingent on the performance of an underlying asset—typically a market index like the S&P 500—while the principal remains guaranteed, usually backed by deposit insurance.

Because financial institutions market these products differently, they can be confusing for consumers. They may be listed as:

• Equity-Linked GICs
• Market-Linked GICs
• Principal Protected Notes (PPNs) (Note: PPNs are technically debt instruments issued by the bank, not deposits. Therefore, they carry issuer risk and may not be covered by CDIC deposit insurance)
• Index-Linked GICs

Return Mechanics

Returns are variable and governed by specific formulas rather than a fixed interest rate: