Canada Savings Bonds (Series 120) 1 year 0.40%

[Spade]

Canada Savings Bonds » About Canada Saving Bonds

Okay, let's figure this out. Series 120 (Nov.1, 2009) 1 Year Interest 0.40%.

Suppose I had $10 000 000. Yep, that's a 1 followed by 7 zeros, and I purchased Series 120, my annual interest would be $40 000. Yep, that's a 4 followed by 4 zeros. Not quite enough to live on; still would have to collect bottles from the ditches to top up my income!

Now, more realistically, suppose I purchased $10 000 of these bonds. After a year, I'd earn $40. That's about $3.33 a month. Double-double anyone?

Question: Who in their right mind would buy these bonds, with 40¢ interest on a $100 investment?

 

[SirJosephPorter]

I heard that on CBC radio this morning. Money Market Fund pays more than that. And it is a completely safe, totally fluid investment (you can withdraw your money any time you want). Having a Money Market Fund is really similar to having a Savings account (with more interest).

I have never invested in Canada Savings Bonds; I don’t see what the attraction is.

 

[Spade]

II don’t see what the attraction is.

Frankly, I don't either! Does the government think people through fear will invest in CSBs to finance the deficit at practically no cost?

 

[Liberalman]

CSBs who would have thought

 

[Kreskin]

CPI is in negative territory. Anyone right now wanting short term security get security and not much more.

 

[Spade]

CPI is in negative territory. Anyone right now wanting short term security get security and not much more.

Does security begin with an eff?

 

[SirJosephPorter]

CPI is in negative territory. Anyone right now wanting short term security get security and not much more.

I haven’t looked at my Money Market Funds lately. It wouldn’t surprise me if they are also currently giving 0.25%. There are a few high interest MMFs (usually they require a minimum balance), they may pay slightly more.

 

[Spade]

CIBC Flexible GIC 1 Year
Annually 0.150%

That's 15¢ on a $100 bond.

 

[SirJosephPorter]

That is even less than .25%. Amazing. Why would anybody buy a GIC (I haven’t invested in a GIC for 13 or 14 years now) or CSB? Far better to leave your money in a savings account or Money Market Fund.

 

[Kreskin]

Money Market funds are about .15 - .20

 

[Spade]

Savings accounts, well top rate is around 0.75%. Not a good option either!

 

[taxslave]

Better to put in in the mattress, at least the government won't know you have it and the bank won't steal it. .15% is way below rate of inflation if you count gas and food.

 

[Kreskin]

Inflation is above it if you take energy out.

 

[SirJosephPorter]

Savings accounts, well top rate is around 0.75%. Not a good option either!

Savings account, Money Market Fund, these are only stop gap measures, Spade, until you decide what you are going to do with the money. These vehicles didn’t pay much at the best of times, so the low interest rates don’t really mean a whole lot. Normally you wouldn’t leave your money there, it would be invested somewhere, in stocks, bonds etc.

Long term bonds still pay around 5%. Recently I bought one that matures in 20 years. And there are of course, stocks. I think there are still good bargains to be had in the market (I am waiting for a correction though; I think we may be due for a 10% correction, that would translate into more than 1000 point drop in TSE).