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What are Canada Savings Bonds?
Canada Savings Bonds (CSBs) are a financial product issued by the Bank of Canada and are guaranteed by the Government of Canada. Being backed by the Government of Canada provides investors with the benefit of capital guarantees provided by the country itself. Because of the secure nature of this type of investment, the associated interest rates on CSBs are low and are almost at historically low levels presently.
CSBs have both regular and compound interest features and a maturity life of ten years – they can be nonetheless redeemed at any time if the investor so desires. They were launched in 1946 by the federal government of Canada and helped finance the country’s war efforts during the World Wars. After the Second World War the Canadian government wanted to support savings amongst its residents and this instrument helped immensely in these efforts.
How do Canada Savings Bonds Work?
The federal government of Canada sells CSBs between the months of October and April. They can be purchased from banks and investment firms in denominations as small as $100 Canadian. Some firms also offer CSBs to their employees through payroll deduction plans. Generally only individuals are allowed to purchase CSBs. The specific terms and conditions of each yearly issue of the CSB varies from year to year. The hallmark of the CSB is that it can be cashed at its full face value plus (in most cases) any accrued interest at any bank at any time before maturity.
 How can Canada Savings Bonds be redeemed?
Investors who invest in Canada Savings Bonds (CSBs) can either hold the bonds until their maturity dates or they can redeem them prior to maturity in most cases. Redemption of Canada Savings Bonds (CSBs) on maturity simply means that the investors receive all of their principal investment and any interest which is due which has not been paid out. Redemption of Canada Savings Bonds (CBSs) prior to maturity is a simple process. Canada Savings Bonds can be redeemed on line in many cases or can be redeemed at most financial institutions including banks, trust companies and credit unions.
If you are looking to redeem your certified Canada Savings Bond within three months of its issue date – you will receive only the full face value of the bond or the principal amount you invested in originally. If redemption is made after the first three months then you will receive the principal plus all applicable interest earned for each complete month elapsed since the date of its issue.
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The investment products offered by Guaranteedinvestments.com include annuities, guaranteed investment funds, GICs, insured annuities, guaranteed minimum withdrawal benefit plans and guaranteed lifetime withdrawal benefit plans.
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