The Bank of Canada’s overnight rate is 2.25%, yet the posted five-year mortgage rate at Canada’s major banks has recently been above 6% while a one-year posted GIC rate has been far lower.

Those numbers can make it seem as though mortgage and savings rates should move together but simply do not.

A new Statistics Canada study released September 21 provides a useful look inside that difference by showing how Canadian banks earn and spend interest.

Canadian banks make money from more than account fees

The new Statistics Canada banking study divides bank income into two broad categories.

The first is net interest income.

This is essentially interest earned on loans, mortgages, securities and other assets minus interest paid on deposits and other funding.

The second is non-interest income, which includes areas such as wealth management, investment banking, capital markets, commissions and fees.

Consumer account and card fees are part of the picture, but Statistics Canada notes that they make up only part of non-interest income.

The Big Six dominate Canada’s banking assets

Statistics Canada reports that Canada’s six largest banks held approximately 93.4% of the industry’s total assets by the fourth quarter of 2025.

The study therefore uses the Big Six as a major representation of Canada’s banking sector.

This number describes market structure. It does not, by itself, establish what rate any individual bank should charge for a mortgage or pay on a savings account.

Net interest income rose to $19.9 billion in the fourth quarter of 2025

The banking industry’s quarterly net interest income was $13.2 billion in the first quarter of 2020.

By the fourth quarter of 2025, it had risen to $19.9 billion.

Statistics Canada says rising interest rates were an important part of the increase in interest revenue, although banks also paid considerably more interest to depositors as rates rose.

The difference between the two sides—not simply the mortgage rate—is what contributes to net interest income.

Why doesn’t a savings account pay the mortgage rate?

A mortgage is money the bank lends to a customer.

A savings deposit is money the customer provides to the financial institution.

The two therefore sit on opposite sides of a bank’s balance sheet.

Banks earn interest from borrowers and pay interest to depositors.

The difference is influenced by the type of loan, funding costs, credit risk, competition, loan growth and broader interest-rate conditions.

That is why comparing a 5% mortgage directly with a 2% deposit rate does not mean the remaining three percentage points simply becomes profit.

Banks also have operating expenses, credit losses, capital requirements and other costs.

Variable mortgage rates and fixed mortgage rates respond differently

This is another reason mortgage rates do not all move together.

The Financial Consumer Agency of Canada explains that variable mortgage rates are commonly expressed relative to a lender’s prime rate.

If prime changes, the variable mortgage rate can change with it depending on the contract.

Fixed mortgages operate differently.

Statistics Canada notes that fixed-rate mortgage pricing is closely linked to Government of Canada bond yields.

This means a Bank of Canada announcement can affect financial markets without causing every fixed mortgage rate to move by exactly the same amount on the same day.

Maple Curiosity’s Fixed vs Variable Mortgage in Alberta 2026 guide explains how the two structures affect borrowers differently.

What are the current benchmark numbers?

As of September 23, the Bank of Canada’s target overnight rate remained at 2.25%.

The Bank’s most recent posted-rate series for major chartered banks showed a prime rate of 4.45% on September 16.

The same series listed the conventional five-year posted mortgage rate at 6.09% and the one-year posted GIC rate at 2.60%.

These are posted benchmark rates.

They should not be interpreted as the exact mortgage or GIC rate every customer will receive. Financial institutions can offer discounts, promotional rates or different products.

Why GICs often pay more than regular savings accounts

Statistics Canada’s study notes that fixed-term deposits generally account for the majority of banks’ deposit interest expense.

A GIC usually requires a customer to leave money with an institution for a fixed period or accept restrictions on withdrawals.

A regular savings or chequing balance is generally more accessible.

That difference can allow fixed-term deposits to pay higher interest than highly liquid demand deposits.

It is another reason that saying “the bank pays X on savings” is too broad. Different deposit products have different funding characteristics.

A lower Bank of Canada rate does not instantly reset an existing fixed mortgage

Someone with a fixed-rate mortgage normally keeps the contractual interest rate for the length of the mortgage term.

The borrower negotiates a new rate when the mortgage renews.

That means today’s overnight rate matters for financial conditions without immediately changing the payment on every fixed mortgage already outstanding.

For borrowers approaching renewal, Maple Curiosity’s Canada Mortgage Rules 2026 guide explains the stress test, down payments and other qualification rules that can matter during a new mortgage application or renewal-related decision.

Bank income can rise even while deposit interest expenses rise

During the rapid interest-rate increases beginning in 2022, banks earned more interest from loans and securities.

But they also paid substantially more interest on deposits.

Statistics Canada’s data show interest expense on term deposits increased dramatically from the very low-rate period.

That illustrates why looking only at the rate charged to borrowers does not provide a complete picture of banking income.

Credit losses reduce bank income too

Banks also set aside provisions for loans that may not be fully repaid.

Statistics Canada’s study shows provisions for credit losses increased during periods of economic uncertainty.

In the fourth quarter of 2025, provisions for credit losses were approximately $3.6 billion in the industry’s quarterly income calculation.

Non-interest operating expenses were approximately $23.9 billion during the same quarter.

After those and other items, net income before taxes was approximately $14.5 billion.

What about the safety of savings and GICs?

Interest rate is only one thing to check when deciding where to keep cash.

The Canada Deposit Insurance Corporation protects eligible deposits at CDIC member institutions up to $100,000 per insured category, including principal and interest.

Eligible deposits can include chequing accounts, savings accounts and qualifying GICs.

Coverage categories are separate, which means an individual can potentially have more than $100,000 of total insured deposits across different categories or member institutions.

Stocks, bonds, ETFs, mutual funds and cryptocurrencies are not CDIC-insured deposits.

Full details are available from CDIC’s deposit insurance guide.

Mortgage rates are only one part of borrowing affordability

A lower mortgage rate can reduce interest costs, but affordability also depends on the loan amount, amortization, income, down payment and qualification rules.

This is why a movement in the Bank of Canada rate cannot be translated directly into a specific amount every household will save.

Maple Curiosity’s Bank of Canada Interest Rate Outlook 2026 provides additional context on the relationship between monetary policy, inflation and borrowing costs.

What should consumers compare?

For borrowers, compare the actual mortgage offer rather than only the bank’s posted rate.

That includes the interest rate, term, prepayment privileges, penalties and whether the rate is fixed or variable.

For savers, compare the actual savings or GIC rate, whether the rate is promotional, how long it lasts, withdrawal restrictions and whether the institution and product qualify for deposit insurance.

The Bank of Canada rate is an important starting point for Canadian financial conditions.

But the new Statistics Canada data show why it should not be treated as a direct price tag for every mortgage, GIC or savings account in the country.