A Canada Savings Bond is not actually a Bond!

August 10th, 2007 • Related • Filed Under
                                                         

canada_savings_bond.jpgIf you have read the post on what a debenture is this will make more sense. But because a Canada Savings Bond is only secured by the "general credit worthiness" of the Government of Canada it is not a bond, but rather it is a Debenture.  The reason for this? The "Canada Savings Debenture" is not as catchy from a marketing perspective.  The Canada Savings Bond/Debenture is among the safest investments you can make - because the Government has the power to print more money if it cannot make it’s obligations - or it can raise taxes.  Neither of which is really good economic policy long term, but that’s another story… :)

 




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What is a Debenture?
When Interest Rates Go Up Bond Prices Fall
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