Fixed income investments
Once the mainstay of Canadian savers, Canada Savings Bonds
(CSBs) and Guaranteed Investment Certificates (GICs) are still
effective investment vehicles for short-term cash needs, safety
and liquidity.
CSBs are interest-bearing Government of Canada securities
that are sold through most Canadian financial institutions
in October of each year. They are available with regular or
compound interest guaranteed for one or more years with denominations
ranging from $100 to $10,000. In 1995, the government introduced
a new RRSP option that allows investors to register their
Canada Savings Bonds (Series 50) directly in the form of a
Registered Retirement Savings Plan, without needing a self-directed
plan.
GICs are securities issued by financial institutions, such
as banks, trust companies, credit unions and life insurance
companies. The rate of interest is guaranteed and they are
available for specified terms. GICs of up to five years issued
by members of the Canadian Deposit Insurance Corporation (CDIC)
or the applicable provincial credit union deposit guarantee
corporation are covered by deposit insurance up to $60,000.
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