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  5. CASH: Hi there, I'm evaluating the fixed income portion of my portfolio and am debating between a ladder GIC vs a HISA ETF. [Global X High Interest Savings ETF]
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Q: Hi there,

I'm evaluating the fixed income portion of my portfolio and am debating between a ladder GIC vs a HISA ETF. I understand GICs are locked in rates and HISA etfs are floating, but can you provide any insight as to the general historical differences in performance over historical time? In other words, say 100k split into 5 rungs of 20k vs 100k in a floating rate HISA etf - is there any difference in performance historically?

Thank you!
Asked by Michael on March 27, 2025
5i Research Answer:

We do not have much data on this. This article does discuss historical GIC rates. But we have not see similar averages for a 'laddered' approach. But intuitively, GICs will likely always outperform HISAs. First, the locked in nature of GICs allows for higher rates. Small trust companies' rates can be quite attractive. Second, the yield curve is usually positive, meaning longer term rates are higher than short rates. With HISA ETFs being very short term, in 90% of cases short-term rates will be lower than long term, and with a say, one-to-five year GIC ladder the average rate is likely to be significantly higher than HISA rates, nearly all the time (buy maybe not 100% of the time in rare market event cases). It is of course important to remember that GICs are guaranteed, to $100,000, and ETFs are not.