The season to buy Canada Savings Bonds is right around the corner, as they will be on sale come October. You can go to your bank or financial institution or even your investor to purchase some bonds. It doesn’t cost very much, as little as a hundred dollars, and what’s more than that, you are investing in your country.
Canada Savings Bond came into being as Victory War Bonds in 1946, in order to pay for the war effort. A few years ago, there was a rumour the program would cease, since Canada was not facing a burdening deficit. However, with the recent government spending for economic stimulus plans, we will undoubtedly see Canada Savings Bonds coming back into the national spotlight.
The Role of Canada Savings Bonds: Our government issues bonds to raise capital, often to pay down deficit spending. You are investing your money into a bond, which is then pooled with the money from other bond owners, creating a bond pool. The government will then borrow from the bond pool to finance our country (or pay down our deficit). For the privilege of using your money, the government will pay you interest. Canada Savings Bonds are offered in ten year terms, but are fully cashable at any time although you might suffer an interest penalty if you cash a bond in early.
Why Investing Now is Important: Bonds allow our government a means to borrow funds to service the country without raising taxes or looking to foreign countries to invest in us. The current economy would only suffer from a tax increase, so that leaves debt investors. Obviously, owing a debt to the Canadian public is preferable to owing a debt to another country.
What is in it For You? Even if you forget about the political and economic merits of Canada Savings Bonds, they still have a lot to offer the average Canadian as an investment opportunity.
A safe, low risk investment, which is fully protected and backed by the government.
The rate of return, as announced by the Minister of Finance each year, is guaranteed.
No fees or charges for purchase.
The Bonds are not locked in; therefore, you can cash them at any time.
Bonds can be purchased for another person, as a gift for family or friends.
The minimum investment is only $100.
Many employers allow investments for as little as $2 a week through payroll deductions.
Any Canadian citizen can and should invest in a Canada Savings Bond. According to our National Debt Clock, the share of Canada’s debt is just under $15 thousand per household. Granted, you could just sign a petition complaining about our debt. You might even start a blog or send an email to all your friends. But if you really want to lend your voice and social conscience to providing a solution, drop by your bank or trust company anytime between October and April and buy yourself a piece of Canada.
