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If you’ve ever wondered what happened to Canada Savings Bonds, you’re not alone. For decades, CSBs were one of the most familiar savings products in the country, a safe, government-backed way to earn interest without thinking too hard about it. But the program was discontinued, and if you’re looking for something that fills the same role, you have options. They just look a little different now.
This page covers what Canada Savings Bonds were, why they were phased out, and what modern alternatives Canadian investors can use today. If you’re already familiar with how do bonds work in Canada, you’ll find this a natural next step.
What Were Canada Savings Bonds?
Canada Savings Bonds were low-risk, government-backed savings instruments issued by the federal government. They paid a guaranteed interest rate and could be cashed at any time without penalty, a combination of safety and flexibility that made them popular with conservative savers for over 70 years.
There were actually two types. Regular Canada Savings Bonds (CSBs) paid interest annually and could be redeemed at any time. Canada Premium Bonds (CPBs) offered a slightly higher rate in exchange for less flexibility, they could only be redeemed once a year, on their anniversary date or within 30 days after. Both were issued in denominations as low as $100, which made them accessible to just about anyone.
At their peak in the late 1980s, CSBs represented nearly $55 billion in retail debt outstanding. They were a fixture of Canadian personal finance, something your parents or grandparents might have bought at the post office or through payroll deduction at work.
Why Were Canada Savings Bonds Discontinued?
The federal government announced in its 2017 budget that it would stop issuing Canada Savings Bonds and Canada Premium Bonds. The last series went on sale in the fall of 2017, and no new bonds have been issued since.
The reasons were practical. Participation had been declining for years as Canadians gained access to other savings and investment products, GICs, high-interest savings accounts, and online brokerages made alternatives easier to find. At the same time, the cost of administering the program remained high relative to the shrinking number of buyers. The government concluded the program no longer served its original purpose efficiently.
Existing bonds continued to earn interest until their maturity dates, with all outstanding CSBs and CPBs reaching final maturity by the end of 2021. They can still be redeemed, but they no longer earn interest.
What Can Replace Canada Savings Bonds for Canadian Investors?
The good news is that the core appeal of CSBs, low risk, capital preservation, and a reasonable return, hasn’t disappeared. It just lives in different products now. Here are four alternatives that serve a similar purpose.
GICs (Guaranteed Investment Certificates)
GICs are probably the closest modern equivalent to what CSBs offered. You deposit money with a bank or credit union for a fixed term, anywhere from 30 days to five years, and receive a guaranteed interest rate in return. Your principal is protected, and most GICs at federally regulated institutions are insured by the Canada Deposit Insurance Corporation (CDIC) up to $100,000 per category.
The main difference from CSBs is liquidity. Most GICs lock your money in for the full term. Cashable GICs exist, but they typically come with a lower rate. If you valued the anytime-redemption feature of CSBs, a cashable GIC or a different product on this list might be a better fit.
Government Bond ETFs
A government bond ETF holds a diversified basket of government bonds and trades on a stock exchange, just like a regular stock. You get exposure to federal and provincial bonds without needing to buy individual bonds yourself, and you can sell your units at any time during market hours.
The trade-off is that unlike a GIC or the old CSBs, the price of a bond ETF fluctuates. If interest rates rise, the value of your ETF units may drop, and vice versa. You’re not getting a guaranteed return in the same way. But for investors who want government-backed bond exposure with full liquidity and low minimums, a government bond ETF in Canada is a practical option.
Direct Government and Provincial Bonds
You can also buy individual Government of Canada bonds or provincial bonds through a brokerage account. This gives you direct ownership of the bond, you know exactly what coupon rate you’re earning, when interest is paid, and when you’ll get your principal back at maturity.
The catch is accessibility. Individual bonds typically require a minimum investment of $5,000 or more, which is higher than what CSBs required. For those comfortable with that threshold, it’s the most direct replacement. Our guide on how to buy government bonds in Canada walks through the process.
High-Interest Savings Accounts (HISAs)
A high-interest savings account offers a competitive interest rate with no fixed term and full liquidity, you can deposit or withdraw whenever you want. For savers who valued CSBs primarily for their flexibility and safety, a HISA in Canada is arguably the most natural replacement.
The downside is that HISA rates aren’t fixed. They can change at any time based on the bank’s discretion and the broader interest rate environment. So while you get day-to-day accessibility, you don’t get the locked-in certainty of a GIC or a bond. Deposits at CDIC-member institutions are insured up to the standard coverage limits.
How Do These Alternatives Compare to Canada Savings Bonds?
Each alternative covers part of what CSBs offered, but none replicates the full package. Here’s how they compare on the factors that matter most:
| Factor | GICs | Gov Bond ETFs | Direct Bonds | HISAs |
| Capital safety | Guaranteed; CDIC insured | Gov-backed bonds; price fluctuates | Gov-backed; face value at maturity | CDIC insured |
| Return | Fixed rate for term | Variable; depends on market | Fixed coupon to maturity | Variable rate |
| Liquidity | Locked in (most terms) | Sell anytime on exchange | Sell on secondary market | Fully liquid |
| Minimum | As low as $500 | Price of one ETF unit | ~$5,000+ | $0 at most banks |
| TFSA/RRSP eligible | Yes | Yes | Yes | Yes (HISA TFSA) |
The right choice depends on what mattered most to you about CSBs. If it was the guaranteed return, look at GICs. If it was liquidity, consider a HISA. If it was government-backed income, direct bonds or a bond ETF may be the better fit.
How Do I Get Started with a Canada Savings Bond Alternative?
If you’re ready to move forward, here’s a practical starting point:
- Assess your priorities. Do you need guaranteed capital protection, full liquidity, or a fixed return? No single product delivers all three perfectly, rank what matters most.
- Choose an account type. A TFSA shelters your interest or investment income from tax. An RRSP defers tax until withdrawal. A non-registered account has no tax advantages but no contribution limits.
- Open the right account. For GICs and HISAs, your bank can set this up. For bonds or bond ETFs, you’ll need a self-directed brokerage account.
- Select a product. Match the product to your priorities from step one. If you’re choosing bonds, our guide on how to invest in bonds Canada covers the options in more detail.
Frequently Asked Questions
The federal government announced the end of the program in its 2017 budget. The last series of CSBs and CPBs were sold in the fall of 2017. All outstanding bonds reached final maturity by the end of 2021 and no longer earn interest.
No. No new Canada Savings Bonds or Canada Premium Bonds have been issued since 2017. If you hold an existing bond, it can still be redeemed for its face value plus any accrued interest up to its maturity date, but it is no longer earning interest.
Existing bonds continued to earn interest until their individual maturity dates. All CSBs and CPBs reached final maturity by the end of 2021. Holders can still redeem them through their financial institution or the Bank of Canada.
In practical terms, yes. CSBs were backed by the Government of Canada. GICs at federally regulated institutions are insured by CDIC up to $100,000 per depositor, per insured category. The protection mechanism is different, but the capital safety for most retail investors is comparable.
Yes. Both GICs and bond ETFs are eligible to be held in a TFSA, RRSP, FHSA, or non-registered account. Holding them in a TFSA means any interest or investment income is sheltered from tax.
A GIC is a deposit product offered by a bank or credit union with a fixed term and guaranteed return. A government bond is a debt instrument issued by a government that pays regular interest (coupons) and returns face value at maturity. GICs are simpler and fully guaranteed. Bonds can be traded on the secondary market and carry some price risk if sold before maturity.
It depends on what you valued about CSBs. If flexibility was your priority, the ability to cash out at any time, a HISA is the closest match. If a guaranteed, fixed return mattered more, a GIC or a bond held to maturity would be a better fit. HISAs offer variable rates that can change at any time.
Both were government-backed and paid guaranteed interest. CSBs could be cashed at any time, while CPBs could only be redeemed once a year on their anniversary date (or within 30 days after). In exchange for the reduced liquidity, CPBs offered a slightly higher interest rate.
Disclaimer: The information provided on this website is for educational and informational purposes only and should not be construed as financial, investment, or trading advice. We are not licensed financial advisors, brokers, or dealers. Always conduct your own research and consult with a qualified financial professional before making any investment decisions. Past performance is not indicative of future results, and all investments carry risk, including the potential loss of principal.
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