Short Term vs. Long Term GIC

I've been looking at GICs and thinking about my options, considering I have to pay for my term studying abroad as well as paying off my student loans by summer of next year. A financial advisor at CIBC told me it was better to put my money into short term GICs--mostly because I'm a student, but also because short term GICs will pay out interest at the end of 30, 60, or 90 day periods. This is better than GICs that wait until one year to pay you interest. So I went about calculating the difference to see what that would look like.

Assume that you have $1000. Let's calculate the difference between parking it in a 30 day GIC repeatedly for one year (i.e., taking the principle plus interest and putting it into another 30 day GIC over and over for a year) versus just putting that principle into a one year GIC. Both GICs pay 4.25%.

$1000 in a one year GIC at 4.25% will yield $42.50 at the end of the year.

On the other hand, how about $1000 in twelve 30-day GICs?

Month	Interest	Running Total
1	$3.49	$1003.49
2	$3.51	$1007.00
3	$3.52	$1010.52
4	$3.53	$1014.05
5	$3.54	$1017.59
6	$3.55	$1021.14
7	$3.57	$1024.71
8	$3.58	$1028.29
9	$3.59	$1031.88
10	$3.60	$1035.49
11	$3.62	$1039.10
12	$3.63	$1042.73

So the total difference between a one year GIC and using twelve 30-day GICs ($1042.73 - $1042.50) is a grand total of $0.23 in one year. Ahh, the value of compound interest. (Granted, twelve 30-day GICs means only 360 days, so there's a five day difference between comparing the totals... School is teaching me to point out the limitations of my research.)