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The Canada savings bond is offered by the government of Canada
to investors from early October through April 1. These bonds
were introduced in 1946 under the name “Victory Bonds” to
serve as a viable and secure option for investors who wanted
more security than mutual funds or stocks could offer. Before
this time, however, Canada had trading instruments that were
similar to Savings Bonds, such as the Canada Fourth Victory
Loan of 1943 and the Canada-Dominion War Savings Certificate,
issued in 1944.
What are the different types of CSBs?
1) The Canada Retirement Savings Plan (RSP): This is a no
cost RRSP (registered retirement savings plan) implemented
for carrying Canada Premium and Canada Savings Bonds.
2) The Canada Premium Bond: This provides a fixed rate of
return in regular and compound interest.
3) The Canada Retirement Income Fund (RIF): This is no cost
fund implemented for carrying the Canada Premium and Canada
Savings Bond.
The Canada Savings Bond and the Canada Premium Bond are very
similar; however the Savings Bond can be cashed at any time
of the year, while the Premium is cashable only one time a
year. Either bond can be purchased with a registered retirement
savings or a retirement income fund. Premium bonds will always
have a higher interest rate than those of Savings bonds sold
at the same time. They can be purchased in compound interest
form or simple interest form, and one kind can be exchanged
for the other at any time.
Why are the Canada Savings Bonds popular?
One reason that Canada Savings Bonds are popular is the security
they offer to investors. Since they are backed by the government,
they make an excellent addition to the secure portion of any
portfolio. In addition, Canada Savings Bonds have a guaranteed
interest rate: they can increase along market lines, but never
fall below a stated percentage for each investment period.
They are an affordable option for almost everyone, with prices
as low as $100.
Who is eligible to purchase these and where can these be
bought?
The Canada Saving Bond, which is available only to Canada
residents, can be purchased on-line, on the phone, in person
at a bank or from an investment broker during its six-month
enrollment period. It can even be acquired through a direct
payroll deduction, making them accessible to just about everyone
in the country. And, there is no brokerage fees involved in
purchasing a Canada Savings Bond. With millions of Canadian
investors purchasing bonds every year, the security of these
bonds will continue to strengthen portfolios of investors
around the country.
On http://www.bond-trading.org/
you will find articles on insured
municipal bond investments and canada
savings bonds.
Article Source: http://EzineArticles.com/?expert=Mike_Singh
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