Government of Canada bonds are among the lowest-risk fixed-income investments available to Canadians. The federal government is rated AAA (or equivalent) by Moody's, S&P and Morningstar DBRS and AA+ by Fitch; hold a bond to maturity and you get its face value back, with fixed interest (coupon) payments along the way. This page covers the types of federal bonds, current yields, how to buy them, how they compare with GICs and bond ETFs, and what happened to Canada Savings Bonds. For fund-based bond exposure, see the bond ETF comparison; for how ETFs work generally, see the ETFs and index funds guide.
What Are Government of Canada Bonds?
When you buy a government bond, you are lending money to the Canadian federal government. In return, the government pays you:
- Coupon payments: fixed interest paid semi-annually (every 6 months)
- Face value: your original investment returned at maturity
These are marketable bonds: the government sells them at auction to dealers, and individual investors buy them on the secondary market through a brokerage. They are different from the old Canada Savings Bonds, which are covered below.
Types of Government of Canada Bonds
| Type | Maturity | Use |
|---|---|---|
| Treasury bills (T-Bills) | Under 1 year | Short-term parking of cash |
| Short-term bonds | 1–5 years | Conservative income |
| Medium-term bonds | 5–10 years | Balanced income/growth |
| Long-term bonds | 10–30+ years | Usually higher yields, more rate risk |
| Real Return Bonds (RRB) | Long-term (no longer issued) | Inflation-protected |
Treasury Bills
T-Bills are short-term: the government auctions them in terms of 3, 6 and 12 months. They are sold at a discount to face value. You don’t receive coupon payments; instead, the return is the difference between the purchase price and the face value at maturity.
Real Return Bonds
Real Return Bonds are indexed to the Consumer Price Index (CPI). The principal adjusts with inflation, so your purchasing power is protected, and the coupon is paid on the inflation-adjusted principal. The government stopped issuing new RRBs after the Fall Economic Statement 2022, citing low demand, but existing RRBs still trade.
Current Government of Canada Bond Yields
Yields change daily. These are the Bank of Canada’s closing yields for September 24, 2026. The 2-, 5-, 10-year and long-term yields are all higher than at the start of the year (the 10-year was 3.47% on January 2, 2026).
| Maturity | Yield (September 24, 2026) |
|---|---|
| 3-month T-Bill | 2.37% |
| 6-month T-Bill | 2.60% |
| 1-year T-Bill | 3.00% |
| 2-year | 3.39% |
| 5-year | 3.69% |
| 10-year | 3.97% |
| Long-term (30-year) | 4.27% |
| Real Return Bond (long-term) | 1.95% plus inflation |
For current daily rates, check the Bank of Canada bond yields page.
How to Buy Government of Canada Bonds
Option 1: Buy Individual Bonds at a Brokerage
Not every brokerage sells individual bonds, and those that do price them differently. Some examples, from each broker’s own pricing page:
| Brokerage | How bond trades are priced |
|---|---|
| Questrade | No cost to buy or sell |
| Scotia iTRADE | $1 per $1,000 of face value ($24.99 minimum, $250 maximum) |
| Interactive Brokers, bank-owned brokerages | Check the broker’s fixed-income pricing and minimums |
The quoted price and yield can differ from the Bank of Canada benchmark, so compare quotes. To buy, log into your brokerage, go to the fixed income section, and search for Government of Canada bonds by maturity date. You will see the coupon rate, yield to maturity and price.
Option 2: Buy Bond ETFs
Bond ETFs hold anywhere from a couple of dozen to thousands of bonds in a single fund:
| ETF | Focus | MER | Duration |
|---|---|---|---|
| ZAG | Canadian aggregate (gov + corp) | 0.09% | Medium |
| XBB | Canadian universe (gov + corp) | 0.10% | Medium |
| ZFL | Long-term federal bonds | 0.22% | Long |
| ZFS | Short-term federal bonds | 0.22% | Short |
| CLF | iShares 1-5 Year Laddered Government Bond | 0.16% | Short |
| XGB | iShares Core Canadian Government Bond | 0.13% | Medium |
ZAG and XBB include both government and corporate bonds. ZFL, ZFS, CLF, and XGB are government-only or government-heavy. A bond ETF’s yield moves with the market; check the provider’s page for the current figure.
Option 3: Buy Through Bank GIC Desk
Government of Canada bonds are bought through an investment firm or brokerage, not at a bank’s GIC desk. GICs are a separate product issued by the bank itself. For actual government bonds, use a brokerage.
Government Bonds vs GICs
| Feature | Government Bonds | GICs |
|---|---|---|
| Issuer | Government of Canada | Bank, trust company or credit union |
| Credit protection | Federal government credit | Deposit insurance: CDIC for member banks (up to $100,000 per category), provincial insurers for credit unions |
| Liquidity | Can sell before maturity | Usually locked in |
| Yield | Market-determined | Often higher for the same term |
| Minimum | Set by the brokerage | Set by the issuer |
| Interest payments | Semi-annual coupon | At maturity or annual |
| Tax treatment | Fully taxable interest | Fully taxable interest |
| Price risk | Yes (if sold before maturity) | No (principal guaranteed) |
Government bonds fit if you want the ability to sell before maturity or the federal government’s credit. GICs fit if you want simplicity, often a higher rate, and don’t need liquidity.
Government Bonds vs Bond ETFs
| Feature | Individual Bonds | Bond ETFs |
|---|---|---|
| Maturity date | Fixed: you get principal back | No maturity (perpetual) |
| Principal guarantee | Yes (if held to maturity) | No (price fluctuates) |
| Diversification | One bond | Many bonds |
| Minimum investment | Set by the brokerage | Price of one ETF unit |
| Management | You manage maturities | Fund manager handles |
| Income | Semi-annual coupon | Regular distributions, often monthly |
| Interest rate risk | Known if held to maturity | Ongoing |
Individual bonds suit a known need on a specific date (for example, saving for a purchase in 5 years). Bond ETFs suit investors who want simplicity, diversification and regular income.
How Bond Pricing Works
Bonds trade at a price that reflects current interest rates:
| Rate Environment | Bond Price | Example |
|---|---|---|
| Rates rise | Bond prices fall | You bought at $100, now worth $95 |
| Rates fall | Bond prices rise | You bought at $100, now worth $105 |
| Held to maturity | Get $100 back | Price fluctuations don’t matter |
This only matters if you sell before maturity. If you hold a government bond to maturity, you receive exactly the face value regardless of what happens to interest rates.
Tax Treatment
Government bond interest is taxed as regular income, the same as employment income and GIC interest, so it is taxed more heavily than eligible Canadian dividends or capital gains.
| Account | Tax Treatment |
|---|---|
| Non-registered | Fully taxable at your marginal rate |
| TFSA | Tax-free |
| RRSP | Tax-deferred |
In a non-registered account, bond interest is taxed more heavily than dividends or capital gains, which is why many investors hold bonds in registered accounts when they have room.
Provincial Government Bonds
In addition to federal bonds, you can buy bonds issued by the provinces. They usually yield more than a federal bond of the same term, because provincial credit ratings are lower than Canada’s. Ratings differ by province and by agency and change over time: British Columbia, for example, was rated A by S&P and AA by Morningstar DBRS as of May 2026, according to the province. Check a province’s current ratings on its finance ministry’s website before buying.
Bond Ladder Strategy
A bond ladder staggers maturity dates so bonds mature at regular intervals. An example with $100,000 split five ways:
| Year | Bond Maturity | Action |
|---|---|---|
| 2027 | $20,000 matures | Reinvest at new 5-year rate |
| 2028 | $20,000 matures | Reinvest at new 5-year rate |
| 2029 | $20,000 matures | Reinvest at new 5-year rate |
| 2030 | $20,000 matures | Reinvest at new 5-year rate |
| 2031 | $20,000 matures | Reinvest at new 5-year rate |
This reduces the impact of interest rate changes: you’re always reinvesting part of the money at current rates rather than locking everything in at one rate.
What Happened to Canada Savings Bonds?
Canada Savings Bonds (CSBs) and Canada Premium Bonds (CPBs) were non-marketable bonds sold to Canadians through payroll deduction at work (CSBs) or through financial institutions and dealers (CPBs). Unlike the marketable bonds above, they couldn’t be traded between investors. In Budget 2017 the federal government announced it was ending both programs. All the remaining outstanding bonds matured in 2021, so no CSB or CPB earns interest any more.
Matured bonds that were never cashed can still be redeemed. The Bank of Canada’s Unclaimed Properties Office has a site that explains how and where to redeem them.
The closest current substitutes are the products on this page: Government of Canada bonds and T-bills for a federal guarantee, or a GIC for a fixed rate with deposit insurance. Money you might need on short notice sits more naturally in a high-interest savings account or a money market ETF.
Related Resources
Sources
The figures and rules on this page come from these sources, last checked against them on September 25, 2026. How we check facts.
- Bank of Canada: Selected bond yields
- Bank of Canada: Data table
- Bank of Canada: Government of Canada benchmark bond yield, 10-year (data series)
- BlackRock iShares: iShares Core Canadian Universe Bond Index ETF | XBB
- BlackRock iShares: iShares 1-5 Year Laddered Government
- BlackRock iShares: iShares Core Canadian Government Bond
- BMO Global Asset Management: ZAG - Factsheet
- BMO Global Asset Management: ZFL - Factsheet
- BMO Global Asset Management: ZFS - Factsheet
- cdic.ca: What's covered — CDIC
- Department of Finance Canada: Archived - Debt Management Report 2022-2023