Turn your compensation into monthly payments
Some people may choose to use their compensation money for everyday needs, save it for the future, or invest it to help it grow. One option that can provide both financial security and steady income is setting up monthly payments.
Monthly payments let you receive a portion of your compensation every month — instead of all at once — while your money earns interest through a secure investment. This can help you:
- Plan for monthly expenses or emergencies
- Budget for important purchases
- Feel confident about your financial future
Monthly payments are available through a specific type of investment called a Guaranteed Investment Certificate (GIC) with regular payments. These are offered by certain financial institutions, and can often be set up online, over the phone, or by visiting a local branch.
What is a Guaranteed Investment Certificate (GIC)?
A Guaranteed Investment Certificate (GIC) is a safe and low-risk investment option.
When you invest in a GIC:
- Your money is “locked in” at a fixed interest rate for a set investment period
- You are guaranteed to earn a certain amount of interest
- Your original investment is protected, even if interest rates change
Some GICs allow you to receive monthly payments during the investment period.
GICs are also insured up to $100,000 by Canada Deposit Insurance Corporation (CDIC) insurance, which means your money stays protected even if something happens to the bank or credit union.
How do monthly payments work?
With a GIC that offers monthly payments:
- You receive a steady income on a regular schedule — usually monthly
- Your payments come from both your original compensation and the interest it earns
- At the end of the term, you will have received the full amount of your compensation plus the interest
Important: If you withdraw all your money early, you may face a penalty, which could reduce the total amount you would have otherwise received. Choose an investment term that works for your needs.
Key features of monthly payments
- Flexible schedules: Payments can be made monthly or on a schedule that works for you
- Custom investment terms: Choose from 1, 2, 3, 5, 10, 15, or 20 years
- Guaranteed payment amount: Your monthly payment stays the same throughout the term
- More interest with longer terms: Longer investment terms often earn more interest over time
At the end of the investment term, you will have received the full amount of your compensation and the interest earned.
Tax tip: Some financial institutions offer GICs through on-reserve branches, which may allow the interest you earn to be income that is not taxed. Speak to your branch to learn if this applies to you.
Example monthly payments
Here’s an example of what your monthly payments could look like with a GIC at 3% interest:
| Compensation Amount | 3-Year Term | 5-Year Term |
|---|---|---|
| $40,000 | ~$1,160/month | ~$720/month |
| $30,000 | ~$870/month | ~$540/month |
| $20,000 | ~$580/month | ~$360/month |
These amounts are examples only. Actual amounts will depend on the financial institution and the terms you choose.
Who offers monthly payments?
The following institutions currently offer GICs with regular payments:
National banks:
Regional institutions:
Other institutions may offer similar options. Speak to your bank or credit union about what’s available.
Need more information?
- Visit the financial information and resources page →
- Explore investing basics from the Government of Canada
- Download the Monthly Payments Brochure (PDF) →
- Talk to someone you trust who knows about finances to help you make the best decision for your needs and goals
