For a few glorious years, Canadian savers could earn 4% or 5% without watching an earnings call, checking a stock price, or doing much of anything at all. That was a pretty good deal.
Now the guaranteed investment certificate (GIC) renewal notice is getting less exciting. One-year GIC rates are around 3.65%, while Canadian inflation ran at 3% in August. That leaves a real return of roughly 0.65% before taxes.
So, if a GIC is landing back in your account, automatically rolling it over deserves a second look.
Source: Getty Images
One enormous advantage
A GIC does precisely what the name promises. Principal and interest are guaranteed by the issuer, and eligible deposits at CDIC member institutions can receive protection of up to $100,000 per insured category.
Stocks offer no such promise. A $10,000 investment can become $9,000 at an extraordinarily inconvenient moment, even while the underlying company remains perfectly healthy. That makes this less of a “GIC or stocks?” question and more about timing.
Money for a house, renovation, tuition, or another short-term expense probably still belongs somewhere boring. Money that won’t be needed for 5 or 10 years has a different job. That’s keeping ahead of inflation and continuing to grow.
That’s becoming more relevant now. The Bank of Canada held its policy rate at 2.25% in September, well below the 5% level Canadians saw during the recent rate-hike cycle. GICs haven’t disappeared, but the unusually generous rates that made them so tempting have faded.
What $10,000 buys
That brings me to Emera (TSX: EMA). Emera owns regulated electric and natural gas utilities, with most of its earnings coming from regulated businesses. In other words, this isn’t a bet on the next gadget Canadians suddenly decide they desperately need. People tend to remain fairly committed to electricity.
At $68.42 per share, $10,000 would buy 146 whole shares for $9,989.32. Emera currently pays $0.73 per share quarterly, or $2.93 annually. Those shares would therefore produce about $427.78 per year, equal to a yield around 4.3%.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| EMA | $68.42 | 146 | $2.93 | $427.78 | Quarterly | $9,989.32 |
A $10,000 GIC earning 3.65% would generate about $365. That’s only $62.78 less. Which is exactly why I wouldn’t buy Emera just for the dividend.
Growth is interesting
Unlike a GIC, Emera can increase both its dividend and share price over time. The company plans to invest roughly $20 billion through 2030, supporting forecast rate-base growth of 7% to 8% annually. Management is targeting average adjusted earnings-per-share growth of 5% to 7% through 2030.
There’s already movement behind those targets. Emera invested more than $1.7 billion during the first half of 2026 and remains on track for a $4 billion capital program this year. Operating cash flow rose 8% during the same period. The dividend has also moved higher over time.
That growth isn’t guaranteed, nor is the current dividend. Yet reinvesting those payments can add another layer of compound growth, particularly when the shares are held for years rather than months.
Bottom line
Emera still carries risks. Utilities require enormous amounts of capital, so debt and interest costs matter. Second-quarter adjusted earnings per share (EPS) also fell to $0.69 from $0.79 a year earlier, even though management expects full-year growth above its longer-term target.
That’s why I wouldn’t empty every maturing GIC into one stock. Instead, investors with sufficient emergency savings and a long time horizon could consider moving part of that money into diversified Canadian dividend stocks.
A 3.65% guaranteed return can still be exactly what short-term money needs. For money that could remain invested for the next decade, however, accepting some bumps today could provide something a maturing GIC can’t. That’s rising income and considerably more room to grow.
