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 A Brief History
Canada Savings Bonds (CSB) were first introduced in Canada in 1946, between the First and the Second World Wars. Originally named the War Savings Certificates or Victory War Bonds, these bonds were introduced to inculcate saving habits in the populace of the country and the funds collected from their sales were utilized to fund the war efforts by the Canadian government. The CSBs were officially launched as part of the Canadian government’s official financing program at that time and still serve as a safe means for investment and savings since each bond is guaranteed by the Government of Canada.
Canada Savings Bonds today
Through the passing of time the Canada Savings Bonds have proved to be quite a popular investment alternative due to their flexibility, safety and convenience. They are popular investment choices for both the young and old as their lowest denomination is $100 dollars and they can easily be purchased and redeemed. Many parents and grandparents purchase these bonds as gifts for their family as they provide a safe investment choice with good liquidity features in most cases.
Canada Savings Bonds can be purchased in regular and compound interest payment methods. These bonds are cashable at any time and come in denominations of $100, $300, $500, $1000, $5000, and $10000 (regular interest bond's lowest denomination is $300). The interest rate is guaranteed for the first year after purchase and then it fluctuates with market conditions for the remaining 9 years until its maturity. These bonds are offered for sale by the government of Canada between the months of October and April.
 Canada Premium Bonds
While CSBs remained very popular for a long time, their popularity waned due to the fact that the rates they offered were not very high and many newer investment bonds were introduced in Canada by private institutions with higher rates and more benefits. To counter the competition, the Canadian government in 1998 introduced the Canada Premium Bonds. These bonds too can be purchased in regular and compounding interest modes.
These bonds differ from the regular bonds in that they are only cashable on the anniversary of the issue date or during the 30 days thereafter. They come in similar denominations as the CSBs. They are sold with guaranteed rates of return for up to year 3 after purchase - with each subsequent year offering higher interest. The interest rate fluctuates for the remaining 7 years with market conditions until its maturity.
A comparison of CSBs and Canada Premium Bonds is as follows:
Features & Attributes |
Canada Savings Bonds |
Canada Premium Bonds |
Fully backed by the Government of Canada |
Yes |
Yes |
Guaranteed Rate of Return |
Yes |
Yes |
Availability with both Regular & Compound Paybacks |
Yes |
Yes |
No fees |
Yes |
Yes |
Cashable at any time |
Yes |
No |
Cashable once a year |
No |
Yes |
Convenient |
Yes |
Yes |
Affordable |
Yes |
Yes |
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Guaranteedinvestments.com provides individuals with professional unbiased financial advice and provides investors with the ability to earn rates of return which are above Canada Savings Bonds Rates. Visit Guaranteedinvestments.com to find the best GIC rates and other safe and secure investment opportunities today. If you are a conservative risk adverse investor then contact us today.
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