Canada Savings Bond

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Canada Savings Bonds are investment instruments offered by the Government of Canada on sale between early October and December 1 every year.[1] Unlike a true marketable bond, Canada Savings Bonds or CSBs are debentures.

The financial product is issued by the Bank of Canada and claims to offer a competitive rate of interest and has a guaranteed minimum interest rate.

Types of CSBs[edit]

Canada Savings Bonds are purchasable in regular and compounding interest. 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). Interest rate is guaranteed for 1 year and fluctuate with market conditions for the remaining 9 years until its maturity. They are green, and picture the Peace Tower of the Parliament building in Ottawa. The new series as of November 1, 2006 picture the Cenotaph in Ottawa.

Canada Premium Bonds are purchasable in regular and compounding interest. 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 denominations of $100, $300, $500, $1000, $5000, and $10000. They are sold with rates up to year 3 with each subsequent year offering higher interest. The interest rate fluctuates for the remaining 7 years with market conditions until its maturity. Previously, the rates were determined for 5 years and fluctuated for the last 5 years. The bonds were maroon in colour and feature a picture of the Library of Parliament in Ottawa. But the new series as of November 1, 2006 are golden in colour and picture the Canadian War Museum.

Canada Investment Bonds were bonds available only through investment brokers and were offered from October 1, 2003 and April 1, 2004. They are non-redeemable until maturity and had 3 year maturities. Only 6 different series were issued. They are currently unavailable.

Plans offered through CSBs[edit]

Usually CSBs are purchased at a financial institution or online at the CSB website and certificates are mailed to the investor. However there are a few plans available in which certificates are not issued.

  • Canada RSP is a no-fee Registered Retirement Savings Plan(RRSP) designed specifically for holding compound interest Canada Premium and Canada Savings Bonds. This product is no longer offered to new customers.
  • Canada RIF no-fee Registered Retirement Income Fund (RRIF) designed specifically for holding the Canada Premium and Canada Savings Bond directly in a RRIF. This product is no longer offered to new customers.
  • Payroll Savings Plans- Employers can provide employees this plan during sale periods. Employees choose how much they would like deducted off their paycheques and it is automatically saved until the employee would like to withdraw. This program was also available under the Canada RSP.

2012 changes[edit]

The CSB website announced that effective fall of 2012 the term of all new bonds will be reduced to three years.[2]

World War I[edit]

"4 Reasons for Buying Victory Bonds" by unknown, Canadian Government created, 1917

Canada started selling war bonds in 1917 to raise money during World War I for the Allies of World War I. Five bond campaigns were held from 1915-1919. To advertise the purchasing of Victory Loans, the Victory Loan Dominion Publicity Committee created artwork, held parades, and had celebrity endorsements. Community members who bought many Victory Loans were given a Victory Loan Honour Flag as a thank you.[3]

Canada Savings Bonds were first offered in 1946 in an effort to replicate the success of Victory Bonds.[4]

World War I poster

The future of the program[edit]

In 2004, consultants gave the Department of Finance a report suggesting the CSB program be scrapped, giving an overall program cost savings of about $650 million in 9 years. And with record budget surpluses recorded by the Liberal government since 1997, the importance of CSBs to finance the government had waned. The value of bonds issued has declined from $55 billion (Canadian) in 1987 to just over $6 billion in 2015.[5]

Then-finance minister Ralph Goodale rejected the recommendation, and opted to have the program changed to be more competitive and attract investors. As of October 2016,[6] the current Liberal government is considering ending the program.

Many Canadians still rely on this program for their investment portfolio, and the program is recognized by 2 out of 3 Canadians as their first investments.[7] This program recognition may give potential to an improved and more popular program. This may suggest that the program may not be scrapped for many years to come.

A government-commissioned study by KPMG in June 2015 recommends canceling the program. Despite this recommendation, the Department of Finance has ruled out canceling the program despite the estimated $58 million annual cost of running the program.

See also[edit]


  1. ^ "CSB FAQ". Govt of Canada. Retrieved 2011-12-07. 
  2. ^
  3. ^ "4 Reasons for Buying Victory Bonds". World Digital Library. 1917. Retrieved 2013-06-30. 
  4. ^ Tasker, John Paul (26 September 2016). "Liberals consider ending costly Canada Savings Bond program". CBC News. Retrieved 27 September 2016. 
  5. ^ Ottawa asks Canadians if Canada Savings Bonds are outdated Bill Curry, The Globe and Mail Sep. 27, 2016
  6. ^ Liberals consider ending costly Canada Savings Bond program John Paul Tasker, CBC News Sep. 26, 2016
  7. ^ "Canada Savings Bonds - An old standby faces new challenges". CBC. 2007-10-03. Retrieved 2011-12-07. 

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