Canada Savings Bonds (CSBs) were a financial product issued by the Bank of Canada that provided a guaranteed rate of return. Introduced in 1946, these bonds offered Canadians a low-risk investment opportunity as well as the ability to help fund post-war efforts.
CSBs were discontinued recently but many Canadians may still be holding on to their bonds, though no interest has been earned on them since 2021.
Despite CSBs not being available for purchase anymore, people are still curious about them. We've created this guide to answer all your questions regarding Canada Savings Bonds, including whether or not you can still redeem them.
Key Takeaways
- Canada Savings Bonds were a guaranteed investment product offered by the government from 1946 until 2017.
- Canada Savings Bonds were discontinued in 2017 but continued to earn interest until 2021.
- Some Canadians still hold Canada Savings Bonds and these can still be redeemed at most financial institutions.
What are Canada Savings Bonds and Canada Premium Bonds?
Also called Victory Bonds, Canada Savings Bonds were originally launched in 1946 and were used to fund the economic growth of our country in the years following World War II. They were a guaranteed investment as the full value of the bond was guaranteed by the government, as was any interest it earned. Anyone could purchase CSBs through payroll deductions.
CSBs went through many iterations since its launch, including branching off into 2 types:
- “R” bonds: Regular interest
- “C” bonds: Compound interest
Canada Savings Bonds rates were competitive for a while, especially considering they were a guaranteed investment which meant very low risk. They were available in certain denominations on 10-year terms, with interest rates that were fixed for the first year, but variable for the remaining 9 years.
But as time went on, CSBs became less and less critical, profitable, and popular. By the end of their run, their popularity had dwindled to the point where institutions only offered them for sale during a few months each year, although they were still redeemable at any time.
When the federal budget of March 2017 was released, it was announced that CSBs would stop being issued in November of the same year.
Canada Savings Bonds discontinued in 2017
In March 2017, the Canadian government released a new federal budget that outlined the end of Canada Savings Bonds after 71 years in circulation. No new CSBs were to be issued as of November 2021.
Shortly afterwards in 2021, all existing Canada Savings Bonds stopped earning interest.
Luckily, the principal and any accumulated interest to that point would be honoured and guaranteed. To this day, you can still redeem your CSB if you still happen to have some in your possession.
Canada Savings Bonds redemption
But the good news is you can still redeem your CSBs to this day – at any time and for free. All you need to do is bring the bond to your financial institution, and they’ll handle the rest.
There’s not much use keeping your Canada Savings Bonds around, since all of them have been matured since 2021 and won’t accumulate any more interest. You’re better off moving the money to a better investment account that will actually grow your fund.
You can contact the Bank of Canada's Unclaimed Properties Office for more information on redeeming your CSB.
Canada Savings Bonds alternatives
Though the Canadian government didn’t implement a direct replacement for Canada Savings Bonds, and while nothing will directly replace Canada Savings Bonds and their rich history, you have plenty of investment options at your disposal.
Here are a few Canada Savings Bonds alternatives to keep in mind.
| Investment type | Pros | Cons |
|---|---|---|
| Canada Savings Bond | * Guaranteed principal and interest by government * Was free to buy * Low maintenance investment | * No longer available to buy * Existing CSBs no longer earning interest * Had low interest rates |
| GICs | * Guaranteed principal and often interest * Flexible options (like cashable vs. non-cashable) * Low maintenance | * Often have low interest rates * Most are locked in for a certain period of time |
| Bonds | * Lower risk * Known value on maturity | * Lower return * Can still fold if the issuing company goes under |
| High-interest savings accounts | * Easily accessible with no maturity dates * Available at most banks * Free to open | * Usually lower interest rates compared to other investment opportunities * Rates can change at any time |
FAQ
What is a Canada Savings Bond?
Canada Savings Bonds were guaranteed investments issued by the federal government from 1946 to 2017. Some Canadians are still holding on to their CSBs, but they don't earn interest anymore. Luckily, you can still redeem them at most financial institutions.
How does Canada Savings Bonds redemption work?
In order to redeem your Canada Savings Bonds, simply bring the bond to a financial institution to get it cashed out for free. Since all bonds matured in 2021, you can cash them out at any time.
What are Canada Savings Bonds rates?
Canada Savings Bonds were discontinued in 2017 and they stopped accumulating interest in 2021. Fortunately, there are still plenty of alternate investment options for Canadians to consider, including GICs which guaranteed investments, similar to CSBs.
What are the Canada Savings Bonds maturity dates?
While Canada Savings Bonds were in circulation, they came in several denominations but all had 10-year terms. After the CSB program was discontinued in 2017, they all officially matured in 2021 and therefore no longer earn interest.
Can you buy Canada Savings Bonds online?
The Canada Savings Bond program was discontinued in 2017, which means Canadians are no longer able to buy them online or anywhere else. There are still several other investment options available, including some with guaranteed returns, like GICs.
Leave a comment
Comments