Savings bond basics
A quick look at how savings bonds work.
Savings bonds are a lower-risk way to save. When you buy a savings bond, you are loaning money to the government for a set period at a fixed interest rate. There are 2 types of savings bonds offered by the Canadian government: Canada Savings Bonds (CSBs) and Canada Premium Bonds (CPBs).
9 things to know about savings bonds
- You can buy a savings bond for as little as $100.
- Savings bonds are available to residents of Canada.
- You don't pay any fees when you buy savings bonds.
- Savings bonds have a 3-year term. Interest rates are usually set for shorter periods.
- You earn a guaranteed interest rate. The rate could go higher during your bond's term, but it won't go lower.
- CSBs have a lower interest rate than CPBs. That's because you can cash them in at any time and get interest earned to date.
- You can cash in CPBs at any time – but you will only get interest earned up to the last anniversary date of the bond.
- You can hold savings bonds in registered investment accounts like TFSAs, RRSPs, and RRIFs.
- CSBs are only available through your employer if they offer a payroll savings plan. CPBs can be purchased through financial institutions, investment dealers or by telephone.
Some provinces also offer savings bonds. Example: Ontario Savings Bonds.
2 interest options
- Regular-interest bonds – You get interest payments each year on the anniversary of the issue date.
- Compound-interest bonds – Interest is automatically re-invested each year.
Buy for limited time only
You can buy savings bonds only at certain times of the year. Ask your bank or check the Canada Savings Bonds website
to find out when they're available. Current sales periods:
- between early October and November 1 for CSBs bought through payroll savings plans
- between early October and December 1 for all other savings bonds.
Other options for short-term savings
Savings bonds are just one of the ways you can save for the short term. Here are some other savings options to consider.