Risks of savings bonds

Note: Canada Savings Bonds Program is no longer available

As of November 1, 2017, the Government of Canada is no longer offering the sale of Canada Savings Bonds (CSBs) or Canada Premium Bonds (CPBs).

For additional information on CSBs, CPBs related to your current Canada Savings Bonds Program investments, visit the Canada Savings Bonds Program website. If you have any questions related to the program, please refer to the Q&A section of the website.

Canada Savings Bonds (CSBs) and Canada Premium Bonds (CPBs) are considered lower-risk investments because they’re backed by the Canadian government. For this reason, savings bonds have a relatively low return compared to other investments. And they may not keep pace with inflationInflation A rise in the cost of goods and services over a set period of time. This means a dollar can buy fewer goods over time. In most cases, inflation is measured by the Consumer Price Index.+ read full definition.

Other things to consider

  • You can only buy savings bonds at certain times of the year.
  • The interest you earn on a savings bondSavings bond A special bond that the federal and some provincial governments will issue. In most cases, it is sold at regular times each year and pays a set rate of interest. Fees are included in the cost of the bond. Examples include the Canada Savings Bond (CSB).+ read full definition will be fully taxed if you hold it outside of a registered accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition. Learn more about how investments are taxed.
  • You may pay a penalty or lose interest earned if you cash in a savings bondBond A kind of loan you make to the government or a company. They use the money to run their operations. In turn, you get back a set amount of interest once or twice a year. If you hold bonds until the maturity date, you will get all your money back as well. If you sell…+ read full definition early.
Caution

Because savings bonds are lower risk, they have a relatively low return compared to other investments. And they may not keep pace with inflation.

3 key points
  1. 100% government backed
  2. Original investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition amount guaranteed
  3. Guaranteed interest rateInterest rate A fee you pay to borrow money. Or, a fee you get to lend it. Often shown as an annual percentage rate, like 5%. Examples: If you get a loan, you pay interest. If you buy a GIC, the bank pays you interest. It uses your money until you need it back.+ read full definition
Last updated