Laurentian Bank of Canada has launched a new multi-rate GIC that offers a 7% rate of retun in the fifth year.

Tthe Xtra Multi-Rater GIC offers a five-year average annual return of 3.808%. It pays a 2.7% rate for the first year, a 2.8% rate for the second year, a 3.2% rate for the third year, a 3.4% rate for the forth year and a 7% rate for the fifth year.

The new GIC offers flexibility if interest rates go up since it can be reinvested on each anniversary date.

“This new investment solution was designed specifically for people looking for a secure investment that would protect their invested capital and guarantee the return, and also wishing to know the future value of their investment. It offers better returns over a five-year period while ensuring some degree of flexibility thanks to the additional reinvestment option,” says Bianca Dupuis, senior manager, investment product development, Laurentian Bank.

It requires a minimum investment of $500 if placed in a RRSP or $1,000 if placed in a non-registered account.