Ottawa, October 3, 2005 2005-063
Related document:
Backgrounder
Ottawa, October 3, 2005 - A commemorative 1945 Victory Bond certificate was presented to the Canadian War Museum today in Ottawa by Finance Minister Ralph Goodale and Veterans Affairs Minister Albina Guarnieri during the launch of the 2005-2006 Canada Savings Bonds sales campaign with its theme "2005 Year of the Veteran and Victory Bonds".
"In this Year of the Veteran we are recognizing the contributions made by the women and men who have served Canada in uniform," said Minister Goodale. "It is also fitting that we recognize the contributions made on the Canadian home front, one of which was the Victory Loan Program and the purchase of Victory Bonds."
"Victory Bonds once financed the fight for freedom and fueled the achievements of our veterans," said Minister Guarnieri. "As Canadians save for a better future, they might remember the veterans who saved a better future for all of us."
The Victory Bond certificate was presented by Ministers Goodale and Guarnieri to Canadian War Museum Director Joe Geurts in a ceremony attended by a number of Canadian veterans, and the President and Chief Executive Officer of Canada Investment and Savings, Louise Montague.
"A dollar here and there for the war effort became part of the family budget during the war years," said Minister Goodale. "Such traditions have lived on in Canada, as many Canadians purchase Canada Savings Bonds as gifts, for their RRSPs or through the Payroll Savings Program. While it is a form of savings, it also continues the tradition of support for our country."
The 2005-06 Canada Savings Bonds sales campaign theme was chosen to mark its roots in the Victory Bond program, and to honour several key events: the 60th anniversary of the end of the Second World War, the 2005 Year of the Veteran and the upcoming 60th anniversary of Canada Savings Bonds.
Minister Goodale also announced a 10-year maturity extension that will allow bondholders of CSB Series 48 to hold their bonds until November 1, 2015, if they choose. The bonds will continue to earn interest at competitive rates.
A backgrounder with further details and highlights of the terms and conditions of sale for the CSB and the CPB is attached.
As in the past, the Minister of Finance reserves the right to terminate sales at any time.
___________________ For further information:
Canada Investment and Savings Media Relations (613) 996-0748
Backgrounder
The 2005-2006 Series
(Canada Savings Bond Series 96 to 101 and Canada Premium Bond Series 46 to
51)
Interest rates for CSB Series 96, CPB Series 46 and outstanding series of the CSB were announced today. Please refer to the accompanying interest rate news release.
Again this year, Canadians have an opportunity to submit their own personal stories about how Canada Savings Bonds have had an impact on their lives in the Tell Us Your CSB Story contest, presented by The Globe and Mail and TVA. Canadians are invited to share their stories online at www.globeandmail.com/csbstory until October 31, 2005.
Effective October 3, 2005, there will be two types of bonds available for sale: the Canada Savings Bond (CSB) and the Canada Premium Bond (CPB). Principal and interest for the CSB and the CPB are fully backed by the Government of Canada.
The CSB offers a Minimum Rate Guarantee on the interest rate for the priced period that may be increased if market conditions warrant. The CSB is cashable at any time.
The CPB offers a higher rate of interest at the time of issue than the CSB on sale at the same time, and is redeemable once a year on the anniversary of the issue date and during the 30 days thereafter. Once an issue date has passed, the announced interest rates for the posted period will not be changed.
The CSB and the CPB are each offered in two forms: regular interest bonds (R-bonds) and compound interest bonds (C-bonds).
R-bonds earn simple interest and pay interest annually until the earlier of maturity or redemption and offer the convenience of direct deposit of annual interest. Bondholders wishing to have annual interest deposited directly into their chequing or savings account may make the necessary arrangements by selecting this option on the application form at the time of purchase.
C-bonds earn both simple interest and compound interest. Compound interest is earned based on the interest earned on each anniversary of the issue date prior to maturity. Simple and compound interest is paid at the time of redemption.
Buying Bonds
Canadians can purchase the CSB and the CPB directly from the Government online at www.csb.gc.ca (24 hours a day, 7 days a week) or by phone toll-free at 1 888 773-9999 (Monday to Friday, 8 a.m. to 8 p.m. Eastern Time). Canadians may also purchase the CSB and the CPB at banks and other authorized sales outlets, including investment dealers, stockbrokers, trust and loan companies, credit unions, caisses populaires and their authorized sub-agents.
In addition, about 12,000 firms and organizations across the country participate in the Payroll Savings Program, enabling their employees to purchase the compound interest CSB through regular payroll deduction.
Issues and When Available
There are plans for six consecutive series of the CSB and the CPB during this campaign, one new series of each bond for six consecutive months:
Issue Date
Expected Sales Period (Cash)
CSB Series
CPB Series
Nov. 1, 2005
October 3 to November 1
Series 96
Series 46
Dec. 1, 2005
November 2 to December 1
Series 97
Series 47
Jan. 1, 2006
December 2 to January 1
Series 98
Series 48
Feb. 1, 2006
January 2 to February 1
Series 99
Series 49
Mar. 1, 2006
February 2 to March 1
Series 100
Series 50
Apr. 1, 2006
March 2 to April 1
Series 101
Series 51
For funds transferred from registered retirement savings plans and registered retirement income funds into The Canada RSP and The Canada RIF, the issue date will be determined by the date on the application form and receipt of funds and documentation by the trustee. Compound interest CSBs and CPBs are the only investments permitted to be held in The Canada RSP and The Canada RIF.
The term to maturity for the November 1 issues of the CSB and the CPB is 10 years.
Sales Period
CSB Series 96 and CPB Series 46 with an issue date of November 1, 2005, will be available for purchase from Monday, October 3, 2005, up to and including Tuesday, November 1, 2005. Those purchasing bonds during the October 3 to November 1 period will be able to date their payments November 1, 2005, the day these bond series start earning interest.
Interest rates were announced today for the November 1 issue of CSB Series 46 (November 1, 1991), CSB Series 47 (November 1, 1992), CSB Series 48 (November 1, 1993), CSB Series 49 (November 1, 1994), CSB Series 50 (November 1, 1995), CSB Series 52 (November 1, 1997), CSB Series 54 (November 1, 1998), CSB Series 60 (November 1, 1999), CSB Series 66 (November 1, 2000), CSB Series 72 (November 1, 2001), CSB Series 78 (November 1, 2002), CSB Series 84 (November 1, 2003), and CSB Series 90 (November 1, 2004). Please refer to the associated interest rate news release. Additional information on CSB rates is available on our website at www.csb.gc.ca and at financial institutions across Canada.
Interest rates for subsequent series of the CSB and the CPB with issue dates from December 1, 2005, to April 1, 2006, will be announced at the beginning of the respective sales period for each issue.
As in the past, the Minister of Finance reserves the right to terminate sales at any time.
Maturity Extension of CSB Series 48
The Minister of Finance has authorized the extension of the maturity date for CSB Series 48 (November 1, 1993) to November 1, 2015. CSB Series 48 bondholders now have the option to hold on to their bonds and continue earning interest for up to 10 more years. CSB Series 48 bondholders still have the option of redeeming or reinvesting their bonds at any time.
RRSP Option
The Canada RSP provides Canadians with the opportunity to purchase the CSB and the CPB directly as registered retirement savings plan (RRSP) investments, with no need for a self-directed plan. Only C-bonds may be held in The Canada RSP.
There are no administrative fees or service charges associated with The Canada RSP or investments held in this plan. The minimum bond purchase in, or transfer in-kind to, The Canada RSP is $500 per series per type of registration.
Investments held in The Canada RSP do not have certificates; instead, statements outlining details of the investments held in the Plan will be issued to the owner.
Purchases of bonds in The Canada RSP can be made online at www.csb.gc.ca (24 hours a day, 7 days a week), by phone toll-free at 1 888 773-9999 (Monday to Friday, 8 a.m. to 8 p.m. Eastern Time), or wherever Canadians bank or invest. Bonds can also be purchased in The Canada RSP through the Payroll Savings Program if the employer selects the RRSP option.
The trustee for The Canada RSP is The Canada Trust Company. Canadians can contact the trustee by calling toll-free at 1 800 575-5151 (Monday to Friday, 8 a.m. to 8 p.m. Eastern Time) or writing to:
Canada Savings Bonds Registered Products P.O. Box 2390, Station D Ottawa ON K1P 1K8
RRIF Option
The registered retirement income fund (RRIF) option gives Canadians the option of transferring funds held in their RRSP or RRIF (except locked-in funds) to The Canada RIF. The Canada RIF is a specially designed no-fee RRIF for holding the CSB and the CPB as investments. The Canada RIF is designed to provide steady retirement income while continuing the deferral of tax on the retirement savings remaining in the fund.
There are no administrative fees or service charges associated with The Canada RIF or investments held in this fund. The minimum bond purchase for The Canada RIF is $500 per series per type of registration.
Holders of The Canada RIF can choose to receive payments every month, every two, three, four or six months, or yearly with the withdrawal amounts completely flexible—provided the annual minimum legislated amounts are met and each payment is a minimum of $25. These payments are made on the first business day of every selected period. A CPB held in The Canada RIF can be redeemed at any time to facilitate regular periodic payments. In addition, lump-sum payments can be requested at any time for the CSB. For the CPB, lump-sum payments can be requested on the anniversary of the issue date and during the 30 days thereafter. All funds withdrawn from The Canada RIF are subject to income tax in the calendar year in which they are withdrawn.
Only C-bonds may be held in The Canada RIF. Investments held in The Canada RIF do not have certificates; instead, statements outlining details of the investments held in the Fund will be issued to the owner.
The December 31 statement will indicate the annuitant's legislated annual minimum withdrawal amount for the upcoming year.
Transfers to The Canada RIF can be arranged wherever Canadians bank or invest.
The trustee for The Canada RIF is The Canada Trust Company. Canadians can contact the trustee by calling toll-free at 1 800 575-5151 (Monday to Friday, 8 a.m. to 8 p.m. Eastern Time) or writing to:
Canada Savings Bonds Registered Products P.O. Box 2390, Station D Ottawa, ON K1P 1K8
Redeeming Bonds
Customers may cash the CSB at any time.
Customers may cash the CPB on the anniversary of the issue date and during the 30 days thereafter. If the CPB is redeemed during the 30 days following the anniversary of the issue date, no interest will be earned for the period following the anniversary date.
The CPB may be redeemed at other times to facilitate regular periodic payments from The Canada RIF or by contacting the Bank of Canada, if evidence acceptable to the Bank of Canada is provided to show that the owner has died; that the redemption is ordered by a court; or that the proceeds of the redemption are required by the owner to avoid bankruptcy, purchase a home further to the Home Buyers' Plan of the Government of Canada, or pursue education further to the Lifelong Learning Plan of the Government of Canada.
No interest will be paid on the CSB if cashed prior to three months following the date of issue, unless the redemption is required to facilitate regular periodic payments from The Canada RIF. Interest earned from the issue date will be paid on bonds redeemed after this three-month period (e.g. after January 31, 2006, in the case of CSB Series 96 issued November 1, 2005). Interest will accrue monthly (except for the CSB purchased through the Payroll Savings Program), which means no interest is earned in respect of the calendar month in which bonds are redeemed. Interest accrues daily for the CSB purchased under the Payroll Savings Program.
For R-bonds (except non-certificated R-bonds purchased through authorized investment dealers), annual interest payments are prepared and issued during the 11th and 12th months following the issue date and anniversary dates. If R-bonds are redeemed during these months, an amount equal to any unearned interest for those months will be deducted from the proceeds of redemption, as that amount will be included in the owner's annual interest payment. This procedure facilitates the preparation of annual interest payments.
Certificated CSBs and CPBs may be redeemed subject to the terms and conditions of the bonds by contacting any authorized sales agent's office in Canada and presenting the bond certificate and proper identification.
Non-certificated CSBs and CPBs purchased through an authorized investment dealer may be redeemed subject to the terms and conditions of the bonds by contacting the investment dealer holding the record.
CSBs purchased under the Payroll Savings Program may be redeemed by the owner 15 days following the date that the Bank of Canada receives the regular payroll deduction from the employer. Redemptions can be made online at www.mybonds.gc.ca, or by calling toll-free at 1 877 899-3599 (Monday to Friday, 8 a.m. to 8 p.m. Eastern Time).
Bondholders may redeem bonds in The Canada RSP and The Canada RIF subject to the terms and conditions of the bonds by contacting the trustee in writing. As with other RRSP and RRIF investments, redemptions may be subject to withholding tax.
Register and Record of Holdings
Both the CSB and the CPB, except for non-certificated CSBs and CPBs purchased through authorized investment dealers, are registered as to principal and interest with the Bank of Canada. Investment dealers that are authorized to sell CSBs hold the record of holdings for non-certificated CSBs and CPBs that are purchased through them. For these non-certificated bond holdings, the bondholders' primary rights and remedies are against the investment dealer holding the record, not the Bank of Canada.
Bonds may only be registered or recorded in the name of residents of Canada as follows: one or more individuals; estates of deceased persons; sole proprietorships; personal trusts; a trustee appointed under a will; and trusts governed by RRSPs, registered pension plans, deferred profit-sharing plans, employee profit-sharing plans, RRIFs and registered education savings plans. Bonds may also be registered in the name of a charitable organization that has a Canada Revenue Agency business number.
For purchases under the Payroll Savings Program, bonds may only be registered in the name of residents of Canada as follows: one or two individuals; estates of deceased owners; in the name of the trust governed by The Canada RSP; and, upon transfer from The Canada RSP, in the name of the trust governed by The Canada RIF.
If certificated bonds are lost or stolen, they will be replaced upon provision of acceptable documentation to the Bank of Canada.
Denominations
Certificated bonds are offered in denominations of $300, $500, $1,000, $5,000 and $10,000. A $100 bond is available in compound interest form only.
Non-certificated bonds purchased through authorized investment dealers are available in multiples of $100 subject to a minimum purchase amount of $300 for R-bonds and $100 for C-bonds.
Bonds purchased in The Canada RSP, The Canada RIF or under the Payroll Savings Program are non-certificated and carry no denominations.
Ownership Limit
The maximum amount of principal that a person may own per series and per type of registration of CSB or CPB is $500,000, respectively. A person may own CSBs and CPBs above this limit if they are purchased with the proceeds of a maturing series, or because the person received them upon the death of the owner or a co-owner.
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For further information:
Tel: 1 800 575-5151 (toll-free) TTY: 1 800 354-2222 (toll-free) Fax: (613) 782-7716 E-mail: csb@csb.gc.ca Website: www.csb.gc.ca
