FISCAL AGENTS: Financial Services Group


Open the QuickNav window
Home
Search
Site Map
Contact

The Knowledge Bank

The Money Centre

The Learning Centre

Financial Tools

The Money Management Newsletter
General Interest
GICs / Fixed Income
RIF Planning
RSP Planning
Savings
Managing Money
Choosing Fin.Services
Insurance Products
RESP Savings
Taxes / Estate Matters
Home Ownership
Companion Advisor
Product Reviews
E-Newsletter Archive
Front Page Archive
Subscription Services

Products and Services

About Us




Google

FiscalAgents.com
World Wide Web

Glossary of
Financial Terms

Find out more
Click above to find out how Fiscal Agents can assist you on investing in GICs.
Now Quick-Nav enabled!
Use this link to connect you directly to additional useful information related to GICs.

 

The Money Management Newsletter: GICs and Fixed Income
2002 Ontario Savings Bonds Information

Ontario Savings Bonds - Historically, rates on this type of Government Bond are priced somewhat lower than competing GICs rates offered by the major banks and Trust CO's. This link or this link will take you to the new rates.

To compare the new bonds with their competitors the enclosed onsite crosslinks will help with that comparison.

The provincial bonds are 100% guaranteed by the Ontario Government. Minimums start at $100, to a maximum of $500,000, with 3 options available. All are available with annual or compound interest.

The Step-up Bond provides an annual interest rate that will increase between years one and five. To recognize value you'll need to compare them with Escalator type Guaranteed Investment Certificates. The blended rate column illustrates an equivalent rate for each year of its full term. We will include the OSB offering rate information in this survey.

Variable-Rate bond - A new rate every six months for seven years - A comparable product would be a 180 day renewable Short Term Deposit. The interest could be paid or compounded over a similar term. The short-term deposit would compound at a semi-annual factor, the OSB compounds annually.

Fixed Rate Bond - This non-redeemable bond will mature on June 21, 2005 and will carry the same interest rate throughout the term. To compare, look at the 3 year GIC rates. The columns in this table can be sorted by year by clicking on the orange headings.

All Bonds - If your have 1999 fixed-rate bonds, you can exchange them for the 2002 bonds. Holders of 1999-2001 Step-up and Variable-Rate Bonds have an additional 14 days to cash their bonds, with interest paid to the redemption dates. OSBs, with the exception of the non-redeemable fixed rate bonds, have the flexibility of being transferred to another person at any time or sold, whereas most Fixed rate or escalator type GICs are not pre-encasable. The GICs and the bonds can be held in a self-directed RRSP or RESP.

One major difference between them is the OSBs has a 100% guarantee vs. the $100,000 CDIC insurance for the term deposit. OSB can only be redeemed on any June/December 21st to be eligible for accrued interest. Whereas most short-term deposits would payout a certain level of interest whenever redeemed after, say 60 days. The term deposit will require more attention over the period.

However, if you are continually rate shopping and as the rate comparison calculators Short / Long Term Investment Calculator indicates, a $50,000 7 year investment with a difference of 1% being maintained, then the accumulated dollars difference is approx. $3,857.00. certainly worth the effort. (Rate comparison as of May 28, 2002)
Short / Long Term Rate Comparison Calculator

Background investment information that you may find useful, can be viewed at our Info-Reports section. Presented in a Features and Benefits format, each report evaluates several aspects of the investment product including investment safety, income return, and access to funds and risk type. Click for profiles for Provincial Bonds and Guaranteed Investment Certificates.

To read the Terms & Conditions of the OSBs, click here.

* * *

Use this link to load a printer-friendly
version of this document.

Do you want to share this page with someone else?
Send this page to
Sending
Format
Text
HTML
Your email address

Have a question regarding this article? Use our feedback form to send us a note.
BACK

© , Fiscal Agents Money Management Newsletter
25 Lakeshore Road, Oakville, On L6K 1C6.
(905) 844-7700

 





Fiscal Agents Home

Knowledge Bank Money Centre
Learning Centre Financial Tools
Newsletter Products & Services
About Us    

Legal | Site Map | Home | Search

Copyright © 1984 - Fiscal Agents Financial Services Group


Questions? Comments?
Use our Feedback page to contact us.

 

GICs And
Fixed Income

2002 Ontario Savings Bonds Information

GICs: A new take on a tried and true investment

New twist to convertible GICs - Buy Mutual Funds; write cheques

Do your homework before buying index linked GICs

Fixed-income investments have a lot to offer

Look into Government Bonds

Strip Bonds - Are they really the investment for you?

Introducing a GIC for life

The lifetime Term Deposit

What is the best fixed term to invest for with rates so low?

How do GICs compare with NHA Mortgage Backed Securities?



The Companion Advisor:
w
Fixed Income