The Season of Canada Savings Bonds

It's almost that time of year again-Bond Time. Canada Savings Bonds will be for sale in October but do you know enough about them to invest your hard earned money? Canada Savings Bonds are investment bonds which are offered by the Federal Government of Canada each year. They are available from October until April and anyone that is a Canadian citizen can purchase them. Federal and provincial government employees, including armed forces personnel, and their immediate family stationed outside the country may also purchase these bonds. Canada Savings Bonds were developed from the Victory bonds and War Savings Certificates that helped finance Canada's war effort in the first and Second World War. After the Second World War had ended the Canadian government decided that they wanted to encourage Canadians to save money and they developed the Canada Savings Bonds in an attempt to encourage people to do just that.

Canada Savings Bonds are a safe, secure, and effective way to save your money. You can choose either the Canada Savings Bond (CSB), which can be cashed at any time, or the Canada Premium Bond (CPB), which you may only cash once a year. Both the CSB and the CPB share a number of similar features. They are both backed by the Government of Canada and are completely safe and secure investments. Both are on sale for six months (October through until April the following year) and can be purchased at financial institutions, online, or be phone. The rates of return are similar to fixed income investments. The CSB has a minimum guaranteed interest rate which protects you as an investor even if the market conditions deteriorate. If the market goes up you will make a better interest rate. The CPB rates will pay the same amount of interest that were in effect at the time you bought them and they will never change after the issue date.

Anyone can buy a CSB or CPB for as little as $100. Some employers offer a CSB through payroll deduction which makes them even more affordable. The interest can be deposited directly into your bank account. Although these investments are not extremely high return, they are a great way to save a little money with little or no risk. Furthermore, if you use payroll deduction to buy your bonds you will save some money on tax. Your employer can set up a special account called the Canada RSP which is a no fee registered Retirement Savings Plan.