GIC interest in a non-registered account is taxed every year at your full marginal rate, even if it compounds and is paid at maturity. In a TFSA it is tax-free; in an RRSP it is taxed only when withdrawn. CDIC covers eligible deposits up to $100,000 per category at each member institution.
FAQ
How much interest does $20,000 earn at 3.5% for 3 years?
$2,174 with annual compounding.
Sources (checked Nov 6, 2026): CRA, interest income reporting (T5); CDIC deposit insurance.