Best Low Risk Investments for Canadians (2025)
(Five-minute read time)
Worried About Where to Put Your Money in 2025? You’re Not Alone.
Hi, I’m David Pipe, founder of WealthTrack. Right now, Canadians are staring down a financial crossroads — high interest rates, inflation pressures, and market volatility are making it harder than ever to know where to invest safely. If your goal is to protect your capital and still earn meaningful returns, you need to act strategically.
The good news? There are more attractive low-risk investment options available today than we've seen in over a decade — and we’re about to show you which ones actually make sense.
In this guide, we’ll break down the smartest low-risk investments for 2025 — with real numbers, tax tips, and strategies tailored to today’s environment.
TL;DR - Key benefits of adopting these low-risk investment strategies (e.g., HISAs, GICs, T-Bills, ISAs, segregated funds, etc.) for Canadian investors in 2025 are:
Capital Preservation: Options like HISAs, GICs, and T-Bills are insured or backed by government guarantees (e.g., CDIC up to $100,000 for HISAs and GICs), ensuring your principal is protected.
Stable Returns: These investments offer predictable yields (e.g., 3%–5.25% for HISAs, GICs, T-Bills, ISAs), providing reliable income in a volatile market.
Tax Efficiency: Using accounts like TFSAs, RRSPs, or leveraging dividend tax credits for blue-chip stocks and REITs minimizes tax burdens, maximizing net returns.
Liquidity and Flexibility: HISAs, ISAs, and money market funds provide daily liquidity, while GIC laddering and T-Bills offer flexibility for short- to medium-term goals.
Estate and Creditor Protection: Segregated funds offer unique benefits like principal guarantees (75%–100%), probate bypassing, and creditor protection, ideal for estate planning or professionals.
Interested in Building Wealth?
Reach out to WealthTrack today!
In 2025, Canadian investors are facing an interesting challenge: how to preserve capital and earn stable returns in an environment of elevated interest rates, persistent inflation pressures, and market uncertainty.
The good news? You have more attractive low-risk investment options than we’ve seen in over a decade. Whether you’re saving for retirement, building an emergency fund, or protecting wealth, these options can help you grow with confidence.
Let’s explore the most effective low-risk investments available to Canadians today — with guidance on safety, tax efficiency, and how to use them.
1. High-Interest Savings Accounts (HISAs)
What They Are: Savings accounts offered by banks and credit unions, often online-only.
Why They Work in 2025: Online HISAs are paying between 3% and 4.5%, offering excellent liquidity without putting your principal at risk.
Protection: Deposits are insured by the Canada Deposit Insurance Corporation (CDIC) up to $100,000 per category per institution.
✅ Best For: Emergency funds, short-term goals, and conservative savers.
2. Guaranteed Investment Certificates (GICs)
What They Are: Fixed-term deposits that pay guaranteed interest, typically locked in for 1–5 years.
2025 Yields: GIC rates range from 4.25% to 5.25% depending on term length and provider.
Protection: Insured by the CDIC if the term is 5 years or less and held with a member institution.
✅ Best For: Capital preservation, medium-term savings, and laddering strategies.
3. Treasury Bills (T-Bills)
What They Are: Short-term debt securities issued by the federal government with maturities under one year.
2025 Yields: About 4.5% annualized for 3- to 12-month terms.
How They Work: T-Bills are sold at a discount and mature at full face value. The difference is your return.
⚠️ Note: T-Bills are not CDIC-insured and must be purchased through brokerages — not directly from the government.
✅ Best For: Parking large cash amounts for a few months with minimal risk.
4. Investment Savings Accounts (ISAs) via Brokerages
What They Are: High-interest accounts offered within brokerage platforms like RBC Direct Investing or TD Direct Investing.
Structure: These are technically mutual funds that hold cash deposits, offering daily interest and same-day liquidity.
2025 Yields: Often 3.75% to 4.5%.
⚠️ Note: Not all ISA deposits are CDIC-insured unless the underlying assets qualify.
✅ Best For: Holding cash inside your TFSA, RRSP, or non-registered brokerage account while waiting to invest.
5. Segregated Funds
What They Are: Investment products offered by insurance companies that provide market exposure alongside protective guarantees.
Why They’re Attractive in 2025:
Modern segregated funds have become much more cost-effective. Many now have management fees that rival traditional mutual funds, making them an increasingly competitive option.
Key Advantages:
🔒 Principal Guarantees: 75%–100% of your deposits are guaranteed at maturity or upon death.
🔁 Reset Options: Some contracts let you lock in market gains periodically.
⚰️ Bypass Probate: Designating a beneficiary allows for direct transfer of proceeds, avoiding probate fees and delays.
🛡 Creditor Protection: Available when contracts are structured properly — ideal for business owners and professionals.
💸 Tax Benefits:
Tax-deferred growth outside registered accounts
Ability to offset gains with internal losses
Cleaner reporting at death compared to some mutual funds
Considerations: Slightly higher fees than ETFs and mutual funds. Guarantees typically require a 10-year holding period.
✅ Best For:
Investors seeking estate planning advantages, market exposure with principal protection, or potential creditor protection.
6. Money Market Funds
What They Are: Mutual funds that invest in ultra-short-term, high-quality debt (like T-Bills and commercial paper).
2025 Yields: Around 3.25%–3.75% net of fees.
Risk Profile: Very low volatility, though not guaranteed or CDIC-insured.
✅ Best For: Holding large sums with daily liquidity and slightly better yields than bank accounts.
7. Dividend-Paying Blue-Chip Stocks
What They Are: Stocks of stable companies that pay consistent dividends.
Examples: Royal Bank (RY), Fortis (FTS), BCE, Telus (T)
2025 Yields: 4%–6% dividend income, often with growth potential.
Tax Advantage: Eligible dividends qualify for the Dividend Tax Credit in non-registered accounts.
⚠️ Risk Note: While more stable than growth stocks, they are still equities and subject to market volatility.
✅ Best For: Long-term investors with moderate risk tolerance seeking income and tax efficiency.
8. Real Estate Investment Trusts (REITs)
What They Are: Publicly traded companies that own and operate income-generating properties.
Focus Areas in 2025: Residential, industrial, and healthcare REITs are viewed as more resilient.
Yields: Commonly 5%–7%, often paid monthly.
⚠️ REITs are equities and may experience market swings — but they also offer a tangible asset base.
✅ Best For: Passive real estate exposure with cash flow.
9. Government Bond Exposure via ETFs or Mutual Funds
Important Update:
Canadians can no longer purchase Government of Canada bonds directly from the Bank of Canada as of 2023. However, you can still access this asset class through:
Bond ETFs (e.g. XGB, ZAG, VGV)
Bond mutual funds
Full-service brokerages offering secondary market purchases
Why Use Bond Funds:
They provide convenient access to government credit quality, diversified maturities, and professional management.
✅ Best For: Conservative portfolios needing stable income and diversification.
Tax Tips for Low-Risk Investments
Interest income (from GICs, HISAs, ISAs, T-Bills) is taxed at your full marginal rate, so registered accounts are your best friend for maximizing returns:
| Account Type | Most Tax Friendly Uses |
|---|---|
| TFSA | GICs/GIAs, seg funds, dividend stocks, REITs |
| RRSP | GICs/GIAs, bond funds, money market funds |
| RESP | GICs/GIAs, ISAs, short-term fixed income |
| Non-Registered | Blue-chip dividend stocks, REITs (tax-efficient income) |
Final Thoughts: Low Risk Doesn’t Mean No Strategy
Canadians today have access to a broader set of low-risk investment tools than we’ve seen in years. But even the safest options work better when paired with thoughtful planning.
🧠 Match your investments to your goals, timeline, and tax situation.
🛠 Use tools like TFSAs, seg funds, and laddered GICs to build a balanced, secure plan.
🤝 And above all — work with a financial planner to ensure your investment choices align with your bigger life strategy.
Need help crafting a low-risk portfolio?
Book a no-obligation call to explore personalized, tax-smart options for 2025 and beyond.
Interested in Building Wealth? Reach out Today!
Get Professional Advice
Hello, I’m David Pipe. At WealthTrack, we can help you reach your financial goals — book a free 15-minute call with us today to find out how to get started.
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