Retirement Savings Bonds

Description
Retirement Savings Bonds (RSBs) combine the benefits of zero coupon bonds, known as STRIPS, and Provincial Bonds in a package to provide an investor with an enhanced level of income at a future date, referred to as the Payout Date. In addition to the deferred income, the initial capital investment is also returned to the investor at maturity.

Objective
RSBs are ideal for investors who wish to offset or match future debt obligations, and may be used to help defer income to meet retirement planning or Registered Retirement Income Fund (RRIF) payment needs.

Suitability
Retirement Savings Bonds are well suited for safety-conscious, income-oriented investors.

Features

• Safety: If the RSB is created from a Government of Canada bond or a provincial bond, then the safety is within the underlying bond. If the RSB is stripped from a Canada bond or a provincial bond, then the government or province backs the interest and principal payments.
• Income: No income until a specific payment date and then payments are semi-annual.
• Liquidity: They may be sold on any business day at their current market value, which can be more, less or the same as the original amount invested.
• Minimum Investment: $5,000
• Tax Status: Any gains realized during the zero coupon period, will be considered ordinary income and not capital gains. As a result, Edward Jones will only allow orders to be placed in a qualified retirement plan due to the nature of the investment & the tax status of the strip portion of the package.

For more information, please contact your Edward Jones financial advisor*.