Ontario Savings Bonds are bond securities issued by the province of Ontario

Ontario

Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....

. Introduced in 2001, OSBs' principal and interest are backed by the Province of Ontario. The OSBs are available from financial institutions, credit union

Credit union

A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...

s, caisses populaires and investment dealers.

Unlike the Canada Savings Bond

Canada Savings Bond

Canada Savings Bonds are investment instruments offered by the Government of Canada on sale between October and April every year. Unlike a true marketable bond, Canada Savings Bonds or CSBs are debentures....

, OSBs are sold only to residents of Ontario.

Types of Bonds

There are three types of savings bonds offered by the province for 2010. The variable-rate bond is a three-year bond that has its interest rate reset every six months. The step-up bond is a five-year bond that has an interest rate that increases every year until maturity. Finally, there are three different terms of fixed-rate bond, a 3-year, 7-year, and 10-year, each with interest rates that are unchanging throughout their term. While the fixed-rate bond can only be redeemed at maturity, step-up bonds can be redeemed semiannually on June 21 or December 21 (and 14 days thereafter), and variable rate bonds purchased 2009 and later can only be redeemed June 21 annually and 14 days thereafter.