Updated:
Comparison · 2026
MIC vs GIC
Mortgage Investment Corporation vs Guaranteed Investment Certificate — two income tools with opposite risk profiles
Everyone knows GICs — the bank guarantees your principal plus a fixed rate. MICs are less familiar: a corporation (Income Tax Act §130.1) that pools investor money to issue mortgages, distributing 100% of net income as dividends. Both produce income, but opposite risk profiles.
MIC
GIC
What it is
Corporation issuing private mortgages, distributes 100% of net income as dividends
Bank deposit with a guaranteed rate for a fixed term
Target / guaranteed return
7-12% historical (target, NOT guaranteed)
3-4% (guaranteed by contract)
Capital guarantee
None — depends on underlying mortgage performance
CDIC-insured to $100K per bank (full guarantee)
Liquidity
Low: redemption only in windows (quarterly/annual)
Locked to maturity (or penalty for early); cashable GICs are liquid
Who can buy
Eligible Investor only (NI 45-106)
Anyone
Income distribution
Monthly distributions (typical)
At maturity or annual
Taxation
Distributions taxed as interest income (not eligible dividend)
Interest income (full marginal rate)
In a registered account
Yes (TFSA/RRSP via trustee account)
Yes (any broker/bank)
Risk
Credit risk (defaults), liquidity risk, manager risk
Near-zero (only inflation risk)
When a MIC makes sense
- You're an Eligible Investor with a diversified portfolio
- Seeking higher income + willing to accept credit/liquidity risk
- Want real-estate exposure without buying physical property
- Have sufficient liquid reserves outside the MIC (since MICs are illiquid)
- You understand target return ≠ guarantee
When a GIC makes sense
- Capital preservation is paramount (emergency fund, short horizon)
- You need 100% predictability (planned expense: down payment in a year)
- You want zero capital risk
- Not an Eligible Investor
- You'll need the money on a specific date
FAQ
If a MIC pays 7-12% and a GIC 3-4%, why hold a GIC at all?
Because the 7-12% MIC figure is a target, not a guarantee, and capital is at risk + illiquid. A GIC's 3-4% is guaranteed + CDIC-insured + (cashable) liquid. For an emergency fund or money you'll need within a year — GIC. For long-term income within a diversified portfolio where you're an Eligible Investor — a MIC may have a place. Different jobs.
Are MIC distributions taxed as eligible dividends?
No — despite the 'dividends' label, MIC distributions are taxed as interest income (full marginal rate), not eligible dividends with the dividend tax credit. That's why MICs are most efficient inside RRSP/TFSA (tax-sheltered), not non-registered.
Can a MIC lose my money?
Yes — a MIC isn't guaranteed and isn't CDIC-insured. If underlying mortgages default en masse (e.g. a real-estate crash), capital is at risk. That's why it's limited to Eligible Investors and why the historical 7-12% is compensation for that risk. A GIC has no such risk.
How do I buy a MIC?
Through an Exempt Market Dealer (like Axcess Capital) after KYC + Suitability. Not available through Wealthsimple/a bank. Eligible Investor self-check: /en/eligibility.
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