Comments on: Canada Savings Bonds

By: What happens when a broker goes bankrupt? | Canadian Capitalist

What happens when a broker goes bankrupt? | Canadian Capitalist — Wed, 03 Feb 2010 04:02:22 +0000

[...] 3rd, 2010 · No Comments Many eons ago, I wrote a post wondering why the Government bothers to sell Canada Savings Bonds when so many competing options are available. The post elicited this interesting comment: Canada Savings Bonds are definitely attractive. In the [...]

By: Change of Heart

Change of Heart — Thu, 28 Jan 2010 19:13:52 +0000

By: Canadian Capitalist

Canadian Capitalist — Thu, 28 Jan 2010 18:11:42 +0000

@Change of Heart: Thank you so much for pointing me to the Marlow Case. I found a good write up here

http://www.farberfinancialgroup.com/uploads/rebuilding%20success%20Spring%2009%20AN.pdf

and will write about it in the future. Though that article mentions that CIPF offers some protection, Perpetual Bull’s point is a valid one. I never realized the importance of holding investments in my name, not the street name.

By: Change of Heart

Change of Heart — Thu, 28 Jan 2010 17:57:02 +0000

A few months ago, I would have echoed 14 of the 15 comments made here. However, do not dismiss the comments of Perpetual Bull. Ask your broker if you bonds (and everything else) are held in “nominee name” or “client name.” Then search for “BIA” and the Marlow case — and find out everything you can about what you think you own…

By: Traciatim

Traciatim — Mon, 05 Oct 2009 19:26:43 +0000

Pretty much Livia, that’s the only reason I can see as well. Plus they are offered through payroll deductions so people don’t have to go through the hassle of opening a bank account and setting up an automatic savings plan. So people are lazy and also have no self control.

You are much better off with a savings account, or better, a tax free savings account.

By: Livia

Livia — Mon, 05 Oct 2009 16:34:17 +0000

I’m researching the benefits of CSBs and so far it seems there’s only one reason to get them. Please let me summarise and correct me if I’m mistaken:

CSBs are good because people have no self-control and can’t resist spending their money as long as it’s available to them.

Is that it?

By: Perpetual Bull

Perpetual Bull — Mon, 26 Jan 2009 06:52:59 +0000

Canada Savings Bonds are definitely attractive. In the last 6 months we have discovered that banks and brokerages can easily collapse. Government bonds held for you at a brokerage still depend on the broker in several ways: you trust that there is no fraud and the broker actually holds a bond for YOU; you trust that the bond is not being loaned out in securities lending; you trust that if the bank/broker collapses, CIPF will speedily process an insurance claim and get your bond back to you. With Canada Savings Bonds you aren’t exposed to any of this middleman risk. In most cases with CSB, you are the certified owner of the bond and you directly hold the bond. This is worth something. I am an expert in bond markets and I still hold CSB (mostly because I don’t trust the banks, brokerages, or CIPF).

By: Jim

Jim — Fri, 31 Oct 2008 13:52:29 +0000

James,
While it is true the money is deducted at source, there are a lot of other ways to get the same thing. As per CRA rules, you can have your employer designate an amount that will not have any deductions applied to it as you would be putting it directly into an RRSP. So you do that with pre-tax money and not get a huge refund (which is a cheap loan to the govt) many months later. Use form T1213 – when I did it many years ago, I had to write a letter and Revenue Canada (as they were known) gave me a letter to give to my employer. Much easier now!

http://www.efficientmarket.ca/article/Reduce-Tax-Withheld

By: Lucy

Lucy — Sun, 04 May 2008 19:55:23 +0000

Is it possible to cash in an american savings bond in Canda? If not, does anybody know how one would go about doing it?

By: bills

bills — Thu, 17 May 2007 23:30:13 +0000

I don’t know how it is in Canada but in the States you can get 5-5 1/2% on money market.