The Canada savings bond is offered by the government of Canada to investors from early October through April 1. These bonds were introduced in 1946 under the name “Victory Bonds” to serve as a viable and secure option for investors who wanted more security than mutual funds or stocks could offer. Before this time, however, Canada had trading instruments that were similar to Savings Bonds, such as the Canada Fourth Victory Loan of 1943 and the Canada-Dominion War Savings Certificate, issued in 1944.

What are the different types of CSBs?

1) The Canada Retirement Savings Plan (RSP): This is a no cost RRSP (registered retirement savings plan) implemented for carrying Canada Premium and Canada Savings Bonds. 2) The Canada Premium Bond: This provides a fixed rate of return in regular and compound interest. 3) The Canada Retirement Income Fund (RIF): This is no cost fund implemented for carrying the Canada Premium and Canada Savings Bond.

The Canada Savings Bond and the Canada Premium Bond are very similar; however the Savings Bond can be cashed at any time of the year, while the Premium is cashable only one time a year. Either bond can be purchased with a registered retirement savings or a retirement income fund. Premium bonds will always have a higher interest rate than those of Savings bonds sold at the same time. They can be purchased in compound interest form or simple interest form, and one kind can be exchanged for the other at any time.

Why are the Canada Savings Bonds popular?

One reason that Canada Savings Bonds are popular is the security they offer to investors. Since they are backed by the government, they make an excellent addition to the secure portion of any portfolio. In addition, Canada Savings Bonds have a guaranteed interest rate: they can increase along market lines, but never fall below a stated percentage for each investment period. They are an affordable option for almost everyone, with prices as low as $100.

Who is eligible to purchase these and where can these be bought?

The Canada Saving Bond, which is available only to Canada residents, can be purchased on-line, on the phone, in person at a bank or from an investment broker during its six-month enrollment period. It can even be acquired through a direct payroll deduction, making them accessible to just about everyone in the country. And, there is no brokerage fees involved in purchasing a Canada Savings Bond. With millions of Canadian investors purchasing bonds every year, the security of these bonds will continue to strengthen portfolios of investors around the country.



Thanks to Mike Singh for contributing this article to our Bonds blog:

High Yield Corporate Bonds

People have often wondered why interest rates vary from financial institution to financial institution as well as why they change so frequently. Simply, interest rates are based on the current strength of the US Dollar in the global marketing scheme. The unpredictability of the exchange rate of our currency creates unpredictability of the interest rates which creates an unpredictability in annual percentage yields on interest-bearing savings accounts. Because of this consumers should be on the watch for the best interest rates available. Banking interest rates fluctuate wildly because they are often based on the ever-changing strength of our country’s currency.

High yield savings accounts offered by most financial institutions offer a more aggressive annual percentage yield compared to regular savings accounts. But such accounts come with a price: the often require a greater initial deposit as well as limit the number of monthly transactions, or they may require a set daily minimum and they may require that the savings account be attached to a checking account so as to avoid the consumer-benefiting effects of compound interest.

Many internet banking services, such as ING Direct, HSBC Bank, GMAC Bank, and Emigrant Direct Bank, may offer a higher interest rate than the more traditional banks because of low overhead providing a broader profit-to-loss margin.

Internet sites such as Motley Fool (www.motleyfool.com) and Financial Times (www.ft.com) offer specifics such as comparative interest rates from any number of financial institutions for the consumer’s review and knowledge. These financial knowledge sites additionally offer web-based savings account calculators that can help their site guests estimate potential gains based upon the initial investment amount multiplied by the annual percentage rate over a certain period of time.

Therefore, investors run the risk of their savings account interest rate dropping below the cost of the debt. Receive higher savings account interest rate than normal savings account. The best savings account interest rates may not be found on the high street, an expert has warned.

When it comes to understanding savings accounts and interest options a wise consumer will study, learn and plan so that they earn as much as they can with any savings account investment. Read what we have on our site on savings accounts and if you need more material on this you can always go to the world wide web again to finish up on your studies. In this information age, there is a lot of options for increasing your knowledge base. Check the links below for more information on Saving Accounts Interest Rates and other related information.



Thanks to Charley Hwang for contributing this article to our Bonds blog:

How Much Is My Savings Bond Worth