Quarterly rates from 2009 to present.
The Canada Revenue Agency sets prescribed interest rates quarterly under Regulation 4301. These rates are used to calculate deemed interest on shareholder loans, employee automobile standby charges, prescribed-rate loan strategies, and certain trust calculations. Understanding prescribed rates is essential for planning prescribed-rate loan income splitting strategies within an estate freeze.
Q2 2026 (April–June): The CRA prescribed rate for prescribed-rate loans, shareholder loans, and employee benefits is 3% — unchanged for the fourth consecutive quarter.
The rate you lock in at the time of the loan applies for the entire term, regardless of future rate changes.
Rates remained at 1–2% from 2009 through 2021, making prescribed-rate loans an extremely effective income-splitting tool during that period. Rates began climbing in 2022, peaked at 6% in early 2024, and have since eased to 3%.
| Year | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| 2026 | 3% | 3% | — | — |
| 2025 | 4% | 4% | 3% | 3% |
| 2024 | 6% | 6% | 5% | 5% |
| 2023 | 5% | 5% | 5% | 5% |
| 2022 | 1% | 2% | 3% | 4% |
| 2020–2021 | 1–2% | |||
| 2009–2019 | 1–2% (1% for most quarters) | |||
In a prescribed-rate loan strategy, the rate at the time the loan is made is locked in permanently — a loan made at 3% today stays at 3% even if rates later rise to 6% or fall to 1%. This makes timing strategically important. Loans locked in during the 1% era (2009–2021) remain some of the most tax-efficient income-splitting tools in Canadian estate planning. At today's 3% rate, the strategy is still relevant for families looking to shift investment income to lower-bracket members within a freeze structure.
Disclaimer: Prescribed interest rates are set by the Canada Revenue Agency and change quarterly. The historical rates shown on this page are for reference purposes only. The current quarter's prescribed rate may differ from rates shown here. Before implementing any prescribed-rate loan strategy or estate freeze, confirm the current prescribed rate with the CRA and obtain professional tax and legal advice tailored to your situation. Prescribed-rate loan strategies have complex legal, tax, and financial implications that require specialized guidance.
Last updated: March 29, 2026.
Prescribed-rate loans can be a powerful tool for income splitting within an estate freeze. If you'd like to explore whether this strategy makes sense for your situation, we're happy to have the conversation.