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Ottawa, August 20, 1998
1998-081
Canada Savings Bond Interest Rate Extended for the Next 2 Months
Related document:
Finance Minister Paul Martin today announced an extension of the rate increase effective June 1, 1998 on outstanding Canada Savings Bonds (CSBs) Series 52 (issued November 1, 1997), Series 53 (issued December 1, 1997) and Series 43 to 49 inclusive (issued from 1988 to 1994). As of September 1, 1998, these series will continue to earn 4.00 per cent per annum for the next two months ending October 31, 1998. Series 50 (1995) and Series 51 (1996) are unaffected and will continue to earn the guaranteed minimum annual rates of 6.75 per cent and 4.00 per cent respectively for the period ending October 31, 1998. All other terms of affected bond series, as well as the rates for the Canada RRSP Bond, remain unchanged.
Mr. Martin said that the rate extension takes into account changes in interest rates since the bonds were priced last fall at 3.00 per cent for Series 52 and Series 53 and 3.25 per cent for Series 43 to 49 and since June 1, 1998 when the rates were temporarily increased to 4.00 per cent for the 3-month period ending August 31, 1998. These rate changes are aimed at maintaining the competitiveness of the CSB relative to other savings and investment instruments in the retail market.
The government will continue to monitor the competitiveness of the interest rates on CSBs and will adjust the rates to reflect changing market conditions as the situation warrants. The guaranteed minimum rates in effect on all outstanding unmatured series of CSBs will be maintained and CSBs continue to be cashable at any time.
A backgrounder providing details is attached. Printed material providing details of interest payments and bond values will be available shortly at financial institutions.
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For further information:
Canada Investment and Savings
Media Relations
(613) 992-9033
(613) 992-2550
Backgrounder
Canada Savings Bonds
CSBs continue to earn 4.00 per cent per annum for the next 2 months effective September 1, 1998.
Effective September 1, 1998 the rate of interest on outstanding Canada Savings Bonds Series 52 (issued November 1, 1997), Series 53 (issued December 1, 1997) and Series 43 to 49 (issued from 1988 to 1994) will continue to earn 4.00 per cent per annum for the 2-month period ending October 31, 1998. Series 50 (1995) and Series 51 (1996) are unaffected and will continue to earn the guaranteed minimum annual rates of interest of 6.75 per cent and 4.00 per cent respectively for the period ending October 31, 1998. All other terms of affected bond series remain unchanged. The Canada RRSP Bond rates remain unchanged.
Guaranteed Minimum Rates on Outstanding Series
Canada Savings Bonds will continue to offer the posted guaranteed minimum rates announced at time of issue and the interest rates on Canada Savings Bonds will be increased if market conditions warrant. But bondholders will never earn less than these guaranteed rates. Annual guaranteed minimum rates for outstanding series are as follows:
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| Series | Interest Rate for the year beginning November 1 (December 1 for Series 53) | |||||||
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| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |
| S53 (1997) | 4.00% | 5.00% | 5.25% | 6.00% | 6.25% | 6.50% | TBA | |
| S52 (1997) | 4.00% | 5.00% | 5.25% | 6.00% | 6.25% | 6.50% | TBA | |
| S51 (1996) | 5.00% | 6.00% | 6.50% | 6.75% | 7.00% | 7.25% | 8.00% | 8.75% |
| S50 (1995) | TBA | |||||||
| S49 (1994) to S45 (1990) | 4.25% | 5.25% | 5.50% | TBA |
Series 45 Maturing |
Series 46 Maturing |
Series 47 Maturing |
Series 48 Maturing |
| S44 (1989) | 4.25% | 5.25% | 5.50% | Maturing | ||||
| S43 (1988) | Maturing | |||||||
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Effective Yields on Outstanding Series
The effective annual yields as at September 1, 1998 for outstanding CSB bond series, including those unaffected by this rate increase, over the next 3 years are as follows:
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| Series Affected by Rate Increase | Series Unaffected | |||||
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| Series (yields calculated are for C-bonds) |
S53(1997) | S52(1997) | S44(1989) to S49(1994) |
S43(1988) | S51(1996) | S50(1995) |
| Effective annual yield as of Sept 1, 1998 until Aug 31, 1999 (i.e., if held for 1 year) |
3.92% | 4.00% | 4.21% | Maturing Nov. 1, 1998 (Note 1) |
4.83% | New Rate(s) Nov. 1, 1998 (Note 2) |
| Effective annual yield as of Sept 1, 1998 until Aug 31, 2000 (i.e., if held for 2 years) |
4.33% | 4.42% | 4.64% | Matured | 5.33% | --- |
| Effective annual yield as of Sept 1, 1998 until Aug 31, 2001 (i.e., if held for 3 years) |
4.62% | 4.68% | 4.92% | Matured | 5.69 % | --- |
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| Note
1: As announced, S43 will earn 4.00% for September
and October. S43 matures November 1, 1998.
Note 2: S50 will earn 6.75% until October 31, 1998. New rate(s) for S50 will be announced in October, effective November 1, 1998. |
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All Series Up To 1987 (S42) Have Matured
All Canada Savings Bonds issued prior to 1988 (S1 to S42) have matured and are no longer earning interest. Holders of CSBs should check their bonds to see if they have any of these matured series.
Additional Information
Additional information on Canada Savings Bonds is available at financial institutions across Canada. For those organizations offering Canada Savings Bonds through the workplace, printed materials providing details of bond values will be sent directly to them. For further information:
Toll Free: 1-800-575-5151
Fax: 1-613-782-7716
E-Mail Address: cis@cis-pec.gc.ca
Web site: http://www.cis-pec.gc.ca/
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| Last Updated: 2004-07-15 |
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