What are Canada Savings Bonds?

Canada Savings Bonds were part of the Canadian personal finance and investing landscape for more than 70 years between 1945 and 2017 as instruments to support the post-war recovery, allowing Canadians to invest in safe and secure securities that earn a steady interest coupon for the first year of investment.

After the first year elapsed, the interest rates would reset based on market rates for the remaining years of the bond’s maturity.

These bonds were redeemable at any point in time.

Introduced after World War II, Canada Savings Bonds supported the Canadian government in raising funding for capital projects, while enabling Canadians to channel their savings into a virtually risk-free asset.

The initiative has been discontinued as of December 2021.

Why are Canada Savings Bonds Discontinued?

While Canada Savings Bonds were great tools to mobilize savings from citizens during periods of reconstruction in the past, the post-war era has led to deeper integration of global capital markets and Canada’s sterling sovereign reputation has allowed the Treasury to borrow funds at significantly more attractive rates than what the government was paying on Canada Savings Bonds.

Based on extensive studies of external funding costs, several government studies concluded that the costs of running the Canada Savings Bond program exceeded the benefits and the federal budget in March 2017 scrapped the program altogether.

However, the government continued to honour all outstanding bonds and made coupon/principal payments to bondholders until maturity.

How to Redeem Canada Savings Bonds?

Canada Savings Bonds have matured and bondholders looking to redeem their holdings should present their bond certificates to their bank or investment dealer to receive their principal and accrued interest.

In cases where these bonds are held within a Retirement Savings Plan (RSP) or Registered Investment Fund (RIF), these accounts would have received the accrued interest, along with the principal outstanding in due course as the bonds matured.

Any unwithdrawn funds in these accounts would have stopped earning interest depending on the bonds held.

The investor needs to instruct their financial institutions or investment dealer to transfer their holdings to another registered investment vehicle.

Did You Know?

Canada Savings Bonds were introduced to replicate the success of the Victory Bonds issued in 1917 after World War I.

Picture of Canada savings bond with a pen

3 Alternatives to Canada Savings Bonds

High-interest Savings Account


Generally, savings accounts aren’t known to offer stellar interest rates when compared to bonds/GICs as they offer flexibility to withdraw funds. However, a high-interest savings account allows investors to get the best of both worlds as they can marry a high-interest rate with the flexibility of withdrawing funds when necessary.


  • One of the most attractive features of high-interest savings accounts is their simplicity.

    Most investors appreciate the ease of managing these investments and the predictability these investments bring to their portfolios.

  • Higher rates are either teaser rates for a short term or the account has a monthly fee and/or transaction charges making the deposit less attractive.


  • Usually, these products are either teaser rates for a short term or the account has a monthly fee and/or transaction charges making the deposit less attractive


A GIC is a low-risk deposit investment that earns interest, similar to depositing money in a savings account, with the return of your principal guaranteed.


  • The principal amount invested is guaranteed by your financial institution and a second layer of protection via the CDIC is also available for up to $100,000.
  • Investors with short-term investment objectives like purchasing a house within the next year can deposit their funds into a 1-year GIC without adding substantial market risk.


  • A GIC is simply a termed deposit with a certain rate of return.

    While some GICs can be broken early by paying early withdrawal fees, certain types of GICs are locked in and unredeemable until the term ends.

Money Market ETFs


Money market ETFs are great tools to spread out the risk of holding funds with a single financial institution and diversify into different investments to pick up greater carry than a GIC/savings account.


  • Professional money managers are responsible for managing money market funds and can access debt market instruments that ordinary investors might not be able to access themselves.
  • Money market funds are less risky as they seek a diversified exposure to different issuers of short-term debt, thereby reducing unsystematic risk from the portfolio.


  • Money market funds are a great product for what they do but hiring such professional expertise usually has higher management expense ratios and they make these investments less attractive as a result.

Frequently Asked Questions

  • Are Canada Savings Bonds still available?
  • Can you lose money investing in bonds?
Sid Mohapatra

Sid Mohapatra is an energy trader based out of Toronto working in power and natural gas trading. Prior to working in commodities, Sid worked at a top Canadian bank’s fixed income and derivatives business. He possesses strong fundamentals in asset allocation, global macro thematic investing and physical commodities.

As a graduate of McMaster University, Sid specialized in Finance and has taught numerous sessions on Investing, Financial Securities and Trading courses. He led and managed the Horizon’s Trading Center at McMaster University.

Sid’s unique experience brings a breadth of institutional knowledge to the retail investing universe. He covers equity derivatives, structured credit instruments and tax harvesting techniques to help Canadians make better financial decisions in the ever-changing landscape of financial markets and investing.