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Investing

Fixed Income

 

Fixed Income Investments

The term fixed income investment describes a group of investments that provide a fixed-rate return for a set period of time. A common type of fixed income investment is a bond. Bonds are issued by the Federal, Provincial or Municipal governments and Federal crown corporations.

What are the benefits of a fixed income investment?

1. Protect your principal and earn interest income

Backed by the issuer, fixed income investments can be a low risk option. Your initial investment is guaranteed by the issuer with the added benefit of interest income options .

2. Flexibility to meet your needs

Subject to your financial needs, fixed income investments offer a variety of maturity and income options .

3. Access to your money when you want it

Bonds can be sold at market value any time should you need access to your funds.

TD Fixed Income Investments

Take a look at the wide range of fixed income investments available to you.

Learn more

Explore your fixed income investment options today
  • Visit any TD Canada Trust Branch or TD Waterhouse
  • Or call 1-866-222-3456 to discuss your options

A Fixed Income investment is a good option if you’re looking to reach your savings goal in the:

Mid-term Long-term

Looking for one-stop investing?

fixed-income

Whatever your objectives, TD Waterhouse gives you access to a wide range of options.

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TD provides safety with interest.

TD Fixed Income Investments can help you build a well-balanced investment portfolio.
We can help you choose from a wide-range of investment options that, if held to maturity, will provide a guaranteed return. Here are two different types of fixed income investments:


1. Government-Issued Fixed Income Investments

Government-Issued Fixed Income Investments are bonds that are fully guaranteed by the issuer for both the principal and the interest. Choose from Federal, Crown Corporation , Provincial or Municipal bonds.

2. Stripped Bonds

Government-Issued Fixed Income Investments that have had their interest payments (coupons) and the principal “stripped” down into separate components and sold individually.

What fixed income investments are available?

  • Government of Canada Bonds

    Government of Canada Bonds pay a guaranteed, fixed rate of interest income until maturity, at which time the face value is repaid.

    The highlights:
    • The safest Canadian investment available in Canada
    • Fully guaranteed principal and interest by the Government of Canada when held to maturity.
    • Provides regular payments of interest.
    • Can be sold at market value at any time prior to maturity.
    • Low minimum investment required
    • RSP/RRIF/RESP eligible through TD Waterhouse

    Explore your fixed income investment options today
    • Visit any TD Canada Trust Branch or TD Waterhouse
    • Or call 1-866-222-3456 to discuss your options
  • Federal Crown Corporation Bonds

    Federal Crown Corporations are special purpose corporations created by an act of the Canadian Parliament. These corporations are either direct obligations of the Government of Canada or fully guaranteed by the Government of Canada.

    Here are the highlights:
    • Carry the same high credit quality of Government of Canada bonds.
    • Fully guaranteed principal and interest by the Government of Canada when held to maturity
    • Generally provides higher yields than similar Government of Canada bonds
    • Can be sold at market value at any time prior to maturity.
    • RSP/RRIF/RESP eligible through TD Waterhouse

    Explore your fixed income investment options today
    • Visit any TD Canada Trust Branch or TD Waterhouse
    • Or call 1-866-222-3456 to discuss your options
  • Provincial Bonds

    Provincial Bonds are direct obligations of Canada’s Provincial Governments. While the level of quality varies by issuing province, TD only sells the highest quality of provincial bonds available at competitive rates. They generally offer a better return than Government of Canada bonds.

    The highlights:
    • Fully guaranteed principal and interest by the issuing province when held to maturity.
    • Can be sold at market value at any time prior to maturity.
    • Provides regular payments of interest
    • Competitive yields.
    • Low minimum investment required
    • RSP/RRIF/RESP eligible through TD Waterhouse

    Explore your fixed income investment options today
    • Visit any TD Canada Trust Branch or TD Waterhouse
    • Or call 1-866-222-3456 to discuss your options
  • Municipal Bonds

    Municipal Bonds are direct obligations of Canada’s Municipal Governments. While the level of quality varies by issuing Municipality, TD only sells the highest quality municipal bonds available at competitive rates compared to similar Government of Canada bonds.

    The highlights:
    • Fully guaranteed principal and interest by the issuing Municipality when held to maturity
    • Can be sold at market value at any time prior to maturity.
    • Provides regular payments of interest income.
    • Competitive yields
    • Low minimum investment required
    • RSP/RRIF/RESP eligible through TD Waterhouse

    Explore your fixed income investment options today
    • Visit any TD Canada Trust Branch or TD Waterhouse
    • Or call 1-866-222-3456 to discuss your options
  • Stripped Bonds

    Stripped Bonds are direct obligations of the issuing government. Strips generally have higher yields than ordinary bonds of similar terms and credit quality. They are ideally suited for RSPs, RRIFs and RESPs because your interest is accrued until maturity where you will receive both your principal and interest payments.

    The highlights:
    • Fully guaranteed principal and interest by the issuing government when held to maturity
    • Government of Canada and Provincial Strips offer the highest guarantee of principal available of any investment sold in Canada, regardless of the size of the investment
    • Can be sold at market value at any time prior to maturity.
    • Competitive yields
    • Low minimum investment required
    • RSP/RRIF/RESP eligible through TD Waterhouse

    Explore your fixed income investment options today
    • Visit any TD Canada Trust Branch or TD Waterhouse
    • Or call 1-866-222-3456 to discuss your options

Looking for one-stop investing?

fixed-income

Whatever your objectives, TD Waterhouse gives you access to a wide range of options.

Learn more

 


Disclaimer for United Kingdom Residents Disclaimer for United States Residents

Have a few questions?

We’ve provided answers to some of the most common questions people have about fixed income investments. Take a look below to find helpful information.

  • 1. How do I begin investing in fixed income investments?

    Visit your local TD Canada Trust or TD Waterhouse branch and speak to one of our financial representatives. They will provide you with the information and advice you need to make an investment that best suits your financial needs.

  • 2. Are fixed income investments guaranteed?

    Fixed income investments are fully guaranteed by the issuer for both principal and interest.

  • 3. What types of fixed income investments available are Government backed?

    TD Canada Trust offers bonds issued by the Federal, Provincial or Municipal governments and Federal crown corporations.

    TD Waterhouse may offer additional options.

  • 4. How much do I need to start?

    Fixed Income investments require a small minimum investment of $5,000.

  • 5. Where can I buy fixed income investments?

    Fixed Income investments are available at your local TD Canada Trust and TD Waterhouse branch. They are also available online through WebBroker.

  • 6. What about taxes?

    A T5, NR4 or R3 will be issued for interest earned during a calendar year, based on your residency.
    A T5008 is issued when the bond matures or for redemptions (if the investment is sold prior to maturity). If you redeem prior to maturity, you may incur a capital gain or loss.
    For Strip Bonds and residual bonds, the purchaser will be required to claim the deemed amount of accrued interest each year even though no interest is paid until maturity.

  • 7. What is Coupon Frequency?

    Most bonds pay interest on a semi-annual basis. For example, a holder of 10000 face value of a 3.00% Government of Canada bond maturing 1 June 2015 would receive $300.00 interest annually (10000 * 3.00%). The interest would be broken down into two $150.00 payments: one on June 1st and the other on December 1st.

  • 8. What is a Face Value?

    The face value of a bond (also know as par value or principal) is the amount paid to the bondholder at maturity.

Fixed Income Investment Glossary

Coupon

This is the portion of the bond that provides the holder an interest payment at a pre-determined rate. Coupons are quoted at an annual rate however most bonds pay interest semi-annually.

Discount

The amount by which a bond sells below its par (or maturity) value.

Government Bonds

Bonds issued by governments (federal ,provincial and municipal), crown corporations, or government agencies. Backed by the taxation powers of governments, these bonds typically have the highest credit ratings.

Investment Grade

Government Bonds considered appropriate for risk-averse investors because they usually represent moderate to low risk. These bonds are usually rated in the top four categories (e.g. A or better) by a bond-rating agency.

Liquidity

The ability to easily convert an investment into cash without significant cost.

Premium

The amount by which a bond sells above it’s par (or maturity) value.

Security

A type of financial instrument. A few examples of securities: a Treasury bill, a guaranteed investment certificate or a savings bond.

Yield to Maturity (or Yield)

The rate of return that an investor can expect to receive if an issue is held to its maturity date and all coupons, as they are received, are re-invested at that yield level. It takes into account the price paid for the bond, its coupon interest rate, its value at maturity and the time remaining until the bond matures.