Maturity term reduced to 3 years to accommodate Canadians’ savings goals
Canada Saving Bonds are now offered exclusively through payroll savings plans.
About 95 per cent of all prior savings bonds are sold through payroll deduction plans by employers. It is estimated nearly one million Canadians sign up to buy savings bonds at 11,500 workplaces, according to the government.
The term to maturity of all new savings bonds will be reduced to three years from 10 years to provide Canadians with the opportunity to reassess their savings goals more frequently.
The payroll savings program is offered to all Canadian employers for free. Employers wanting to participate in the program can register in October on the employers' page on the government’s savings bonds website.
The new issues of savings bonds pay 0.5 per cent interest in the first year
The sole location to purchase Canada premium bonds will be through financial institutions or investment dealers. Premium bonds pay a higher rate of interest than savings bonds — one per cent in the first year, 1.2 per cent in the second and 1.4 per cent in the third.
Premium bonds have been amended to allow Canadians the ability to redeem bonds throughout the year with interest earned up to the last anniversary date of purchase. Previously, premium bonds were cashable only on their anniversary dates or 30 days after. This feature will provide Canadians with improved access to their savings, the government says.
Premium bonds can be purchased until Nov. 1, 2012.
Currently, Canadians have about $9 billion invested in Canada savings bonds and Canada premium ponds. Twenty years ago, that number exceeded $30 billion.
