- Banker's Acceptances
- Commercial Paper
- Crown Corporation Paper
- Government of Canada Bonds
- Government of Canada Treasury-Bills
- IBF Swaps
- Provincial Treasury Bills & Promissory Notes
- Stripped Coupons and Residuals
- TD Term Deposits
Government of Canada Treasury Bills
Treasury Bills (T-Bills) are the highest grade of money market investment available. In fact, because they are issued and guaranteed by the Government of Canada, they are the safest Canadian investments available. You may invest in multiples of $1,000 with a minimum purchase of $100,000, for terms from 1 day to 1 year. You can also make smaller investments at reduced interest rates. Government of Canada Treasury Bills are available in Canadian or U.S. dollars.
Provincial Treasury Bills
Provincial Promissory Notes
Provincial Treasury Bills and Promissory Notes are issued by Canada's Provincial Governments. They offer high quality plus a higher rate than similar Government of Canada investments. With a minimum of $100,000, you may invest for terms from 1 day to 1 year. Multiples of $25,000 are common, but some provinces also issue in multiples of $1,000.
Crown Corporation Paper (Government Guaranteed Commercial Paper)
Crown Corporation Paper investments are short-term promissory notes issued by a Crown Corporation. They are guaranteed by the Government of Canada and offer the same high quality as Government of Canada Treasury Bills, but pay a slightly higher rate of return. You may invest in multiples of $1,000 with a minimum purchase of $100,000, for terms from 1 day to 1 year.
Stripped Coupons and Residuals
Stripped Coupons are interest rate payment coupons detached from bonds issued by Canadian and Provincial Governments or selected corporations. Residuals are government or corporate bonds with their interest coupons detached. Both stripped coupons and residuals are especially attractive if your company can hold the investment until maturity. They usually give moderately higher yields than Treasury Bills or bonds of similar terms, and the issuer guarantees their maturity value. Please note that while interest is paid only at maturity, Revenue Canada deems taxable interest to be received on a regular basis and assesses this yearly. We therefore recommend that you seek tax advice.
TD Term Deposits are interest-bearing deposits that give a fixed rate of interest for a fixed time. Issued and guaranteed by The Toronto-Dominion Bank, they are fully registered, non-negotiable and non-transferable. You can cash them before maturity at a reduced interest rate. You may invest a minimum of $100,000 for terms from 1 day to 1 year.
Commercial Paper investments are short-term, unsecured promissory notes issued by high quality corporations. They earn higher returns than Treasury Bills and Bankers' Acceptances. While TD Bank does not guarantee these investments, they are backed by the general credit of the issuing company and are sometimes supported by an unused credit line or a parent company guarantee. Corporations normally issue Commercial Paper on a discount basis in bearer form, but may also issue as an interest-bearing or registered note. You may invest in multiples of $1,000 with a minimum purchase of $100,000.
Bankers' Acceptance notes are short-term debt obligations issued by corporations, with repayment of principal at maturity guaranteed by a Canadian Chartered Bank. BAs carry the same credit rating as the guaranteeing Bank and usually offer a slightly higher return than Government of Canada Treasury Bills. You may invest a minimum of $100,000 for terms from 1 day to 1 year.
Government of Canada Bonds are the highest quality Canadian bonds with the highest possible credit rating. Because they are widely available, you can be sure of a broad selection of terms when you invest and easy access to your funds when you want to sell. The bonds come in bearer form with interest coupons, or in fully registered form. The Government of Canada fixes the interest rate at the time of issue, and pays the interest semi-annually. While yields on outstanding bond issues may rise and fall daily in the open market, the Government of Canada guarantees to pay the full face value on maturity. Government of Canada Bonds are available in Canadian or U.S. dollars.
International Banking Facility (IBF) Swap Deposit
International Banking Facility Swap Deposits (IBF Swaps) can protect your company against changes in foreign exchange rates and give you higher rates of return than other investments of the same quality. At TD, a Swap Deposit consists of three contracts booked simultaneously, to:
- Convert your Canadian dollars into U.S. dollars.
- Invest these U.S. dollars in a TD Bank U.S. Dollar Term Deposit in your name, at a set rate and for a fixed term. This is done through our International Banking Facility (IBF) in New York.
- At maturity, convert back into Canadian dollars the U.S. dollar face amount of your IBF deposit, plus the interest it has earned. The conversion rate is fixed when you make the investment, so you don't have to worry if the foreign exchange rate changes.
Issued and fully registered by The Toronto-Dominion Bank, IBF Swaps are non-negotiable and non-transferable. You may invest a minimum of $1,000,000 for terms from 2 days to 1 year. Swap Deposits are illiquid because they are difficult to "unwind." Canadians do not have to pay U.S. withholding tax.
The International Banking Facility (IBF) is a full branch of TD Bank, backed by the full faith and responsibility of TD Bank. However, IBF is subject to the laws and banking regulations of the United States of America, New York State and local legislation. It must therefore abide by any changes to Federal Reserve or other statutory regulations as well as any judicial proceedings in the United States.
