GICs Losing Steam: Emera Offers Attractive Dividend Yield Amid Low Interest Rates

For Canadian savers who have seen their Guaranteed Investment Certificates (GICs) mature, it's time to reevaluate their options. With one-year GIC rates now around 3.65%, those earning a 4% or 5% return in the past are disappointed.

The Bank of Canada held its policy rate at 2.25% in September, below the 5% level seen during the recent rate-hike cycle. This has led to a decrease in GIC rates, making them less attractive for long-term investments.

One option worth considering is Emera (TSX: EMA), a company that owns regulated electric and natural gas utilities. With a current share price of $68.42, investors can buy 146 whole shares with a $10,000 investment, earning an annual dividend of about $427.78, or around 4.3%.

While this is not as high as the return on a GIC, Emera has the potential for growth and reinvestment of dividends, which can add another layer of compound growth over time. The company plans to invest roughly $20 billion through 2030, supporting forecast rate-base growth of 7% to 8% annually.