Government of Canada Real Return Bonds pay attractive real
rates of interest and are fully guaranteed by the federal government.
They are available for terms up to 28 years, and are essentially
risk-free if held to maturity. They have all the benefits of
regular Government of Canada Bonds, plus they guarantee
a rate of return that is adjusted for inflation--so you don't
have to worry about the effect rising prices will have on your
retirement income. If you are looking for the above mentioned features, but do not require income, consider investing in a Real Return Stripped Bond.
Common Characteristics
Dollars to Invest/Time Horizon
Minimum investment (at face value) is approximately $5,000. Please note that the actual settlement amount is adjusted for inflation. Current bond issues available mature in 2021, 2026 and 2031.
Risk/Return
Fully guaranteed by the Government of Canada with a return above the rate of inflation. There is essentially no risk with any investment held to maturity--every aspect of the investment is guaranteed, regardless of the size of the investment. Competitive yield.
Liquidity
May be sold at any time, with settlement within three business days.
Income
Interest is paid semi-annually. However, all settlement prices (buys/sells or maturity) and coupon payments are adjusted for the inflation that accrues between the bond's initial issue date and settlement date.
Key Benefits
Safest Canadian investments available in Canada, regardless of the size of the investment.
Guarantees a return greater than inflation if held to maturity.
Fully guaranteed principal and interest when held to maturity.
Principal is adjusted to the rate of inflation, and semi-annual interest payments are calculated using the adjusted principal amount.
High degree of liquidity.
Low minimum investment required.
RSP/RRIF eligible.
Non Registered fixed income investments can be purchased from EasyLine telephone banking at 1-866-222-3456, through your local TD Canada Trust branch or from TD Waterhouse.
Registered fixed income investments can be purchased from TD Waterhouse.
