GIC Question

[healer677]

I have a 5-year GIC that's about to mature this month.

My question is -if I take it in cash and not roll it into an RRSP (like the bank recommends), do I have to pay income tax on the whole amount (initial investment plus the gained interest)?

 

[dandywriter]

and

If it's currently in an RRSP, if you cash it, and take it out of the RRSP, you pay tax on both the original amount and interest.

 

[oldjones]

Money that goes into an RRSP doesn't get taxed until it comes out*.
Money that isn't in an RRSP has already been taxed as you earned it; it doesn't get taxed again.
Interest is new earnings, and gets taxed when you, or the bank, tells the government you have received it.

*The bank will withold up to 20% for income tax, like an employer does. Depending what you file at tax time you'll get some back or pay more. Don't be mislead by the bank folks calling it a penalty; it's just the income tax you avoided when you put the money into the RRSP.

 

[buckwheat1]

ING has the best GIC rates

www.ingdirect.com

 

[gentle_lover]

I think that Indian bank, Inici or whatever its called usually has the highest rates.

and if you like curry, your money will smell like one too! So you get 2 birds with one stone.

 

[King Midas]

I think that Indian bank, Inici or whatever its called usually has the highest rates.

It's ICICI and yes, they're very competitive.

http://www.icicibank.ca/personal/investments/termDeposits.htm