Answers to Help Clarify the End of the Savings Bond Program

Budget 2017 announced the end of the Canada Savings Bond (CSB) Program.

As of November 2017, Canada Savings Bonds and Canada Premium Bonds (CPBs) will no longer be available for purchase either through a financial institution, investment firm, over the phone, online or through a payroll savings plan (if your employer offers one).

The government doesn’t plan to send any notice of this change to bond owners.However, maturity notices will continue to be sent that will inform bond owners of the end of the program. In the meantime, here’s a list of answers from the government to the top questions people are asking:

Q.Is my money safe?

A. Yes. The government states the “bonds (including principal and interest) you hold are safe, guaranteed, and will be honoured.”

Q.Should I redeem my bonds now?

A.There’s no need to redeem them immediately. All unmatured bonds, regardless of where you obtained them, will continue to earn interest until the time of redemption or maturity, whichever comes first. Bonds that have matured no longer earn interest and can be redeemed at most financial institutions across Canada.

As each bond series matures, the principal and interest for the series will automatically be paid out to you (the registered owner) by cheque or direct deposit, according to your account information. A letter will be sent to notify you of the maturing bond series before the payment.

You may, of course, redeem your funds at any date before maturity by going to CSB Online Services here or through the automated telephone service.

Q.Will I still receive interest payments at my anniversary date, if I normally received them before the announcement?

A.Yes. You’ll continue to receive them by cheque or direct deposit until the bond matures or is redeemed.

Q.Can I still enroll in direct deposit to receive my interest payments?

A.Yes. You can enroll in direct deposit to receive interest payments for your regular interest CSB or CPB by completing and sending the Change of Address and Direct Deposit form here. If you don’t have a direct deposit account set up, the Savings Bond Program will send a cheque to the address it has on file.

Q.Can I change the ownership of a bond?

A.A change of ownership can only be done in the event of a separation or divorce.

Q.May I change the name on my bond?

A.Yes. If you’re the registered owner of the bond, you may change the name on your bond due to marriage, adoption, divorce, annulment, separation in marriage or legal name change. If the bond has matured, the government will issue a payment under the new name instead of replacing the bond.

Q.May I still exchange my bond (that is, from compound to regular interest, from regular to compound interest or for other denominations)?

A.Yes. If you’re the registered owner and the bond hasn’t matured, it can be exchanged if you follow the procedures associated with your bond.

Q.What if one of my bonds is lost, stolen or destroyed? Can I still report it and have it reissued?

A.Yes. An unmatured bond can be reissued. If the bond has matured, the bond program will issue a payment instead of replacing the bond.

Q.Can I reinvest my CSBs in CPBs?

A.No.

Q.Where should I invest my money now that the bonds will no longer be sold?

A.Consult with your financial advisor for guidance on alternative investment options.

Q. Are there any changes for customers who hold a Canada Registered Savings Plan (RSP) or a Canada Retirement Income Fund (RIF)?

No.At this time, there are no changes for RSP and RIF plan holders. If and when a change should occur, it will be communicated to them.

Q.Will contributions to my CSB Payroll Savings Plan continue with my employer or will they stop immediately?

A.Your contributions will continue to be deducted from your pay until 31 October 2017 unless you or your employer’s Campaign Director decides otherwise. If you contribute through pre-authorized debit (PAD), those contributions also will continue to be deducted from your bank account until 31 October 2017 — unless you decide otherwise.

You’ll continue to have access to your funds until the entire bond series has matured, at which point they’ll be automatically paid out to you.

Q.What if I want to stop or change my Payroll Savings Plan contributions?

A.To stop or change your contributions before 31 October 2017, contact your Campaign Director or Payroll Administrator. To stop contributions through PAD, contact CSB Program customer service at 1 877 899-3599.

Q.If I redeem all my funds now, does that mean that my account will automatically be closed?

A.Your account will be closed only when your contributions have stopped and all the funds in your plan have been redeemed or paid out at maturity. If contributions are being deducted from your pay, they’ll continue to be deposited into your plan until 31 October 2017 unless you ask your Campaign Director to stop them.

Q.Will I still have access to CSB Online Services?

A.Yes, even after all your funds have been redeemed or paid out.

Q.I’m currently on maternity leave. What does this announcement mean to me?

A.If you currently contribute to your plan while on leave, your contributions will continue to be deducted from your pay until 31 October 2017 unless you or your Campaign Director decides otherwise. If you’re returning to work before then and would like to resume your contributions, contact your Campaign Director upon your return to work to find out if resumptions are permitted.

Q.Do I have to do anything now if I’m on leave?

A.No. If contributions are currently being made through deductions from your pay or through PAD, they’ll continue to go towards your plan until 31 October 2017, unless you decide otherwise.

Q.Will I still be able to purchase CPBs through financial institutions or investment dealers?

A.No.

What Does the Change Mean for Employers? According to the government, CSBs that are purchased through your Payroll Savings Program will no longer be available as of November 2017. This means that there will be no sales campaigns in October and new enrollments are no longer be available. All automatic payroll deductions will continue to be deducted from your employees’ pay and deposited into their CSB Payroll Savings Plans until the program ends. You must stop all deductions in your payroll system as of 1 November 2017. Continue to send all regular scheduled payroll contribution files to the Bank of Canada through the normal procedure. The CSB Program encourages you to communicate the announcement to your employees. You can use the information contained in the sample employee communication template here to let them know about the change. If employees want to change or stop their contributions before the program ends, the decision is at the discretion of your Campaign Director or Payroll Administrator. Any change to contribution amounts must be reflected in your organization’s payroll system and the payroll contribution file sent to the Bank of Canada. At any time, your organization can stop participating in the Payroll Savings Program, but you should let your employees know before stopping payroll deductions. The government won’t send employers a list of all the CSB Payroll Savings Program participants in their organizations. This is due to privacy issues.