Canada Savings Bonds

Canada Savings Bonds differ from other government bonds in that they can be cashed at any bank for the face value plus accrued interest. They cannot be sold by the original buyer but must be held until cashed or until they mature (usually in 7 years) from the time they were bought. The interest rate has been as high as 19.5% and as low as 2.75%, the rate on the first issue in 1946. Canada Savings Bonds, which can be bought on payroll deduction plans and which range in denomination from $100 to $10 000, grew out of the successful raising of money for the war effort in WWII by Victory Bonds and the sale of War Savings Certificates and stamps, not to traditional investors, but to ordinary citizens and even to school children. From the start there has been a limit on the amount of any one issue that any Canadian - they are not sold outside the country - can buy. This limit has been as low as $15 000 and as high as $75 000 (1986). Canada Savings Bonds are a major source of federal government finance; in late 1992 the federal government had borrowed about $35 billion from the public in this form, out of a total debt of $290 billion.