Credit brain – what do you think of saving bonds?
Canada Savings Bonds are now on sale and once again our organization is offering you the opportunity to purchase them through automatic payroll deduction.
The Payroll Savings Program is a simple, convenient and secure way to save for tomorrow. It’s a great way to watch your savings grow over time. Your principal and interest are guaranteed by the Government of Canada.
This year our organization will be participating in an electronic campaign. The “E-Campaign” provides complete electronic services, including: online application, change of existing contribution amounts and complete information about your Plan.
About your bonds:
- Bond information is electronically stored on a Bond Register at the Bank of Canada.
- Annual statements are mailed directly to you and on-line access at www.mybonds.gc.ca provides a way to check status of your bonds year round.
- The interest rate has been set at 2.00% and that rate will be guaranteed for the bond year. Rates may be increased during the year if market conditions warrant.
- Redemptions are made directly with Bank of Canada at 1-877-899-3599 or on-line at www.mybonds.gc.ca
The key here is whether or not these Bonds are a pre-tax or post-tax deduction from your payroll. While 2% is certainly not a huge windfall by any measure, saving as much as 40% by making contributions on a pre-tax basis to an RSP is a no-brainer.
Alternatively, if the deductions are post-tax, it probably makes more sense to pay down your high-interest credit card debt which can be as high as 30%.