The Canada Savings Bond
We all have personal financial goals. Whether you're saving for a family vacation, a down payment on a house, a child's education or for your retirement, it's important to include secure investments as part of your financial plan. That's where Canada Savings Bonds can help. Available from early October to April 1 each year*, they're the smart way to save. Guaranteed.
The Canada Savings Bond (CSB) is a safe, secure investment currently held by millions of Canadians. The CSB offers you maximum flexibility and security. Available in both regular interest or compound interest form, the CSB:
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offers minimum guaranteed interest rates (which will increase should market conditions warrant, but will never fall below the posted rates during the priced period); |
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is cashable at any time, so your money is never locked in; |
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comes backed by the Government of Canada; |
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has no fees of any kind; |
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can be held in The Canada RSP, The Canada RIF as well as in
self-directed plans; and |
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is available with regular or compound interest. |
Held on its own, or as part of a retirement plan, the CSB is a trusted investment that never falls in value. It's perfect for the secure part of any portfolio.
*The Minister of Finance may end the sale of bonds at any time.
Terms and Conditions
Canada Savings Bonds (CSBs) and Canada Premium Bonds (CPBs) purchased pursuant to Form 1 are subject to the terms and conditions approved by the Minister of Finance, which are summarized below.
In these terms and conditions:
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bonds mean the series of CSBs and CPBs on sale on the date you sign and return this form and purchased pursuant to this form; |
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you means the purchaser of the bonds; and |
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we means Canada Investment and Savings and our agent, the Bank of Canada. |
Buying bonds
You may only buy bonds with Canadian currency in denominations referred to in Section 1 of this form. The Minister of Finance may end the sale of CSBs and CPBs at any time.
Who can own bonds
Only a Canadian resident may own bonds.
Bonds may be registered in the following manner:
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in the name of one or more individuals, whether adult or minor; if more than one individual owns the bonds, it may be specified should a co-owner die that the share of the deceased co-owner is to go, subject to applicable laws, to the surviving co-owner; |
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in the name of the estate of a deceased individual or in the name of the trustee appointed under a will; |
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in a personal trust; |
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in the name of a sole proprietorship; |
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in the name of a charitable organization or charitable foundation registered under the Income Tax Act (Canada); and |
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in the name of a trust governed by one of the following plans under the Income Tax Act (Canada) or provincial legislation: a Registered Retirement Savings Plan, a Registered Retirement Income Fund, a Registered Education Savings Plan, a Deferred Profit Sharing Plan, an Employee Profit Sharing Plan or a Registered Pension Plan. |
The maximum amount of principal that a person may own per series and per type of registration of CSBs and CPBs is $500,000, respectively. A person may own CSBs and CPBs above this limit if they are purchased with the proceeds of a maturing series, or because the person received them upon the death of the owner or a co-owner. Otherwise, the Minister of Finance may order a person to redeem the CSBs and CPBs in excess of the maximum limit. No further interest will be earned on the amount of CSBs and CPBs owned above this limit after the Minister's order to redeem. The Minister of Finance may change the $500,000 maximum ownership limit at any time.
If there is any doubt whether a person is eligible to own bonds and how the bonds may be registered, the Minister of Finance has the right to make the final decision.
Regular interest bonds
Regular interest bonds earn simple interest at the rates determined by the Minister of Finance until the earlier of maturity and redemption, based on the denomination of the regular interest bonds. Any simple interest will be paid to the owner on each annual anniversary until maturity, or at the time of redemption (please refer to Redeeming bonds below) unless the regular interest bonds are redeemed during the 11th and 12th months following the issue date and annual anniversary dates.
Compound interest bonds
Compound interest bonds earn, in addition to simple interest, compound interest at the rates determined by the Minister of Finance until the earlier of maturity and redemption based on the interest earned on each annual anniversary of the issue date prior to maturity. Any compound interest will be paid at the time of redemption (please refer to Redeeming bonds below).
Exchanging bonds
At any time before they mature, compound interest CSBs may be exchanged for the same denomination in regular interest CSBs of the same series plus, if applicable, payment of earned interest, and compound interest CPBs may be exchanged for the same denomination in regular interest CPBs of the same series plus, if applicable, payment of earned interest.
Prior to 10 months following their issue date, regular interest CSBs may be exchanged for the same denomination in compound interest CSBs of the same series, and regular interest CPBs may be exchanged for the same denomination in compound interest CPBs of the same series.
At any time before they mature, regular interest CSBs may be exchanged for an equal amount in other denominations of regular interest CSBs of the same series, and regular interest CPBs may be exchanged for an equal amount in other denominations of regular interest CPBs of the same series. As well, compound interest CSBs may be exchanged for an equal amount in other denominations of compound interest CSBs of the same series, and compound interest CPBs may be exchanged for an equal amount of other denominations of compound interest CPBs of the same series.
Transferring and assigning bonds
Subject to the applicable laws and in a manner acceptable to the Bank of Canada, bonds may only be transferred and assigned in the following cases:
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to a trust governed by one of the following plans under the Income Tax Act (Canada) or provincial legislation: a Registered Retirement Savings Plan, a Registered Retirement Income Fund, a Registered Education Savings Plan, a Deferred Profit Sharing Plan, an Employee Profit Sharing Plan or a Registered Pension Plan; |
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from one of the above plans to the beneficial owner or beneficiary thereof; |
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to a beneficiary, estate, or trustee appointed under a will if the owner dies or from the estate or the trustee to the beneficiary thereof; |
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if the owner has a spouse or the bond is owned by spouses of each other, to one of those spouses in the event of divorce or if stipulated in a written separation agreement in form and substance acceptable to the Bank of Canada; |
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from a charitable organization or charitable foundation to an individual as a prize or scholarship; |
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to The Canadian Depository for Securities Limited; and |
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where they are to be pledged to Her Majesty in right of Canada as security for any purpose. |
If the bonds are transferred to The Canada RSP or The Canada RIF, the bonds will become governed by the terms and conditions governing CSBs and CPBs purchased under those plans using Form 2 and Form 3, respectively. The minimum amount in bonds that can be transferred and assigned for each type of registration to The Canada RSP is $500.
Adding owners
The owner may, by providing the Bank of Canada with the properly completed prescribed form, name additional individuals to be co-owners and specify should a co-owner die that the share of the deceased co-owner is to go, subject to applicable laws, to the surviving co-owner.
Redeeming bonds
CSBs may be redeemed by the owner at any time by contacting any authorized sales agent's office in Canada and presenting proper identification.
CPBs may be redeemed by the owner on any annual anniversary of the issue date or during the 30 days thereafter by contacting any authorized sales agent's office in Canada and presenting proper identification. If CPBs are redeemed during the 30 days following the annual anniversary of the issue date, no interest will be earned for the period following the anniversary date. In the event that evidence acceptable to the Bank of Canada is provided to show:
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the owner has died; |
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the redemption is ordered by a court; or |
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the proceeds of redemption are required by the owner:
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to avoid bankruptcy; |
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to purchase a home further to the Home Buyer's Plan of the Government of Canada; or |
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to pursue education further to the Lifelong Learning Plan of the Government of Canada, |
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CPBs may be redeemed at other times by contacting the Bank of Canada.
No interest is earned on any bonds redeemed during the first three months after the issue date.
No interest is earned in respect of the calendar month in which bonds are redeemed.
For regular interest bonds, as interest payments are prepared and issued during the 11th and 12th months following the issue date and annual anniversary dates, if regular interest bonds are redeemed during these months, an amount equal to any unearned interest for those months will be deducted from the proceeds of redemption as that amount will be included in the owner's annual interest payment.
Errors
Neither we nor the Minister of Finance will be responsible for any errors or omissions in any correspondence, statements, or certificates we send unless the Bank of Canada is advised in writing of such error or omission within 30 days.
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