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the HERALD Money Matters Wednesday October 1991 Are Canada Savings Bonds your best investment By PAUL J ROCKEL Herald Special are a unique investment instrument that are accepted There are perceived to be a guaranteed no risk invest and are purchased tinglv every fall by many dians The element of risk is not over come by simply allowing in vestors to get their money at an time If vou consider three changes the government has im in recent years II soon discover why Canada Sav Bonds have little appeal for discerning investors First CSBs no minimum rate guarantee after the first year Second recent issues of have been set at lower rates than other similar alternatives When short term rates change upwards in the middle of a and start cashing in their bonds the government is slow and in making ad Third the SI earned in terest deduction on tax return has been eliminated CSBs and all other interest earning in are now taxes from the first dollar there is the effect of in flation Let sav for example a SI bond and plan to hold for This rate will probabh be around per cent with rates trending down this mav be as good a rate as will get for the frve ears rates will go up so let s sav that per cent for the five years Inflation has averaged over per cent for the last 30 years the government says it is going down now Maybe Let assume tion will average per cent In real terms it means your original will decrease in value per cent each year True it will still have a face value of 000 but it will only buy 773 78 worth of goods and groceries five vears from now When vou consider income tax the in interest earned even at the lowest tax bracket of per cent will give you to spend The per cent inflation eating at vour will rob vou of another 50 bv the end of the first and inflation turn the per cent interest into- per cent actual cash spending er At higher rates of tax return is in negatne territory Are Canada Savings Bonds realK a risk free place to put vour mone I don think so Mam people bin CSBs on the paroll savings plan Do vou know that must about per week for weeks to buy a SI bond That s SI You are paving for the bond interest as it accumulates after tax monev Then the government taxes on that interest Neat trick If vou insist upon earning in there are other alter natives Five vear GICs that monthlv or quarterlv interest are available there are cashable GICs and other products from various financial THE CORPORATION OF THE Town of Halton Hills ESTABLISHED The Town of Halton Hills Celebrating The 10th Anniversary of The Library and Cultural Centre Proudly Presents JOHN ARPIN In Concert Internationally renowned pianist and composer with his renditions of Ragtime New Orleans Jazz and Contemporary Music at the JOHN ELLIOTT THEATRE 9 Church Street Georgetown Saturday October 19 1991 at 800 PM Reserved Seating 1500 GST Inci Hosted In Part By Kentner Catering Roos Travel the Herald Available at The Cultural Centre and Civic Centre or phone 8732600 ex 285 or 268 and also at the Herald St tions that offer the same safety and liquidity as A real estate mutual fund has tax advantages that can provide a significant after tax income ad vantage as well as protection of your capital when compared to a or Canada Savings Bond Not many people are familiar with them You can even receive a regular monthly income from the property rents and pay less tax too If you are saving for retirement or are retired and need the in come you owe it to yourself to check out the investment alter natives available that will best suit you If your objective is either of these two it could be in your bet interest to talk to an independent financial planner who will consult with you at no charge He or she will have knowledge of various tax saving alternatives as well as the availability of financial pro ducts from a large number of financial institutions to tailor a custom plan for you Customer appreciation Employees at Georgetown CI BC branches were in high fashion and high spirits during Customer Ap Day Tuesday Oct l Herald Photo The biggest mortgage breakthrough in a decade Only at Canada Trust If your mortgage is coming up for renewal you should consider the benefits of our unique Split Level Mortgage with the best of both open and fixed term mortgage features Until November 9th you can get up to a 1 rate reduction on a Split Level Mortgage when you bring more of your business to Canada Trust Call any branch listed below for details Canada Trust El OPEN 8 AM TO 8 PM MONDAY TO FRIDAY SATURDAYS 9 AM TO 5 PM Main at James 8772266