Savings bonds are issued in a number of forms by the federal and some provincial governments. They are evidence of a loan by the investor to the issuing government and are backed by the general credit and taxation powers of the government. Savings bonds are usually offered for sale to individual investors at regular times each year. Purchase limits often apply.
Bonds are evidence of a loan by the investor to the government or company that issues the bond. The issuer generally promises to pay a specified rate of interest to the bond holder and to repay a certain amount (the face value of the bond) at maturity. Bonds may be sold at prices higher or lower than their face value. Corporate bonds are typically secured by a pledge of specific assets. Some bonds offer holders the right to convert their bonds into common shares.
Debentures are similar to bonds, but typically not secured by the pledge of specific corporate assets. They may, however, be secured by a ‘floating charge' on the issuer's assets generally.
4.Treasury Bills (T-bills)
Treasury bills are short-term (less than one year to maturity) debt securities issued by the federal and some provincial governments. They do not pay interest but instead are sold at a price below their value at maturity. T-bills are issued by the government regularly and are typically sold in large denominations.
5.Guaranteed Investment Certificates (GICs)
GICs are deposit certificates issued by financial institutions. Most GICs pay specified rates of interest to maturity, although some base the returns to investors on the performance of a benchmark such as a stock exchange index.