Government Guaranteed Commercial Paper
Government Guaranteed Commercial Paper investments are short-term
promissory notes issued by Crown Corporations (e.g. the Canadian
Wheat Board, The Federal Business Development Bank) and fully
guaranteed by the Government of Canada, no matter how much you
invest. They offer the same high quality as Government of Canada
T-Bills, but pay a slightly higher rate of return. Many Crown
Corporations issue commercial paper denominated in U.S. as well
as Canadian dollars, and both are considered Canadian content
within your RSP/RRIF. Crown Corporation Paper is available for
terms from one month to one year. Like all money market investments,
Crown Corporation Paper can be sold at market value at any time,
should you need access to your funds prior to maturity.
Common Characteristics
Dollars to Invest/Time Horizon
Minimum investment (at face value) $100,000, and multiples of $1,000 thereafter. Terms vary from one month to one year.
Risk/Return
Direct obligation of the issuing Canadian Crown Corporation and fully guaranteed by the Government of Canada. 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. Offers slightly higher yields than Government of Canada T-Bills.
Liquidity
Highly liquid; may be sold at any time, with settlement within one business day.
Income
Earnings are distributed at maturity.
Key Benefits
- Highest guarantee of principal available of any investment sold in Canada, regardless of the size of the investment.
- Fully guaranteed principal and return if held to maturity.
- Higher yielding than term deposits, GICs and Government of Canada T-Bills.
- High degree of liquidity.
- RSP/RRIF eligible.
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