Strange the things that appear in old safety deposit boxes. After drilling out one of my father's abandoned boxes, we found a few old Canada Savings Bonds made out in my name, dating from when I was a mere toddler.
I figured I could cash them in and start an education fund for wee Henri-Georges. With compounding interest at today's level of returns, we should be able to comfortably get him through at least his first term at Sal's Refrigerator Repair Academy.
So down to the bank I went with bonds in hand.
Now, you'd think that a bank, what with all the finance-y things they do from 10 to 4, would be able to calculate the maturity value of a Canada Savings Bond. You know, seeing as we're in Canada, and these are not uncommon securities.
The two banks I brought it to, however, puzzled over the certificates for quite a length of time, and only much later phoned me back to report their guesses as to each bond's worth. Two different guesses, as it turned out, and also different--and, crucially, lower--than my own estimate.
Now, while it is true that I undertook a fair chunk of financial training in my previous Bay Street life, I'm not entirely confident in my bond calculation. So, I'm turning it over to you, faithful reader, with a small incentive to make it interesting (No, not one of the bonds. I mean, c'mon. But something north of a cheap bottle of booze and south of a carton of smokes. Choose your vice.)
How much is this Canada Savings Bond worth?
- 1971/72 S26 Series
- $100 face value
- all certificate "A", "B", and "C" coupons still attached
To get you started, I'll include a Government of Canada link to the CSB redemption values for matured, "old style" bonds. If you can find any more information on how to value these bonds, let me know.
Bonus points for something that I can--literally--take to the bank to prove to them what these damned things are worth.
The conversation quickly moved to Facebook after Fawn Fritzen passed along my challenge. So far the results are as follows:
- $100: Simon R. Gosh, I hope he's wrong. Either that or he's playing Price Is Right rules.
- $104.25: Bank A's first guess.
- $124: Bank A's second guess.
- $187: Bank B's guess.
- $211: Kennie H. My guess too, but contest rules exclude employees and family members from the running.
- $211.25: Michael P. Michael apparently charged a small inconvenience fee to the bank for my troubles. Good on ya!
- $285: Michael P. Gosh, I hope he's right.
Keep the guesses coming...
- Kennie on 20120704.Wednesday:
Hi, Fawn posted up a link to your "financial brain teaser" and this is the best that I could figure out (I've never seen a bond with coupons before) Redemption Value + Interim Cash Bonus + ABC Coupons + some added interest (maybe) 104.25 + 19.75 + 87.00 + ?? = 211 (give or take). But this is also a guess based off of how the CSB site kinda explained, but really didn't explain on how to determine the value of the bond. "Coupon Bonds are redeemable at their face value plus the value of each attached coupon plus, if applicable, the value of any attached compound interest certificates plus, if applicable, such cash bonus payments as announced by the Government of Canada." CBS also has a number you can call regarding these coupon bonds 1 800-665-8650. Good luck!
- Jim Atwood on 20120704.Wednesday:
Saw your post on FB. Hope this link helps you out. I'm in the US so no smokes or booze needed due to tariff. http://www.csb.gc.ca/wp-content/uploads/2009/11/matured_s1-s31.pdf
- Dave on 20120704.Wednesday:
Kennie: Good show. That's about what I came up with too: almost double what one bank told me. And thanks for that number. You're in the lead!
- Dave on 20120704.Wednesday:
Jim: Thanks, but that's the link I had already posted. I saw that one of the bankers even had a printout of that table and they still were way off (in my opinion), but I'll see if the feds can actually decipher one of their own instruments. Hopefully older US bonds are easier to deal with (I have some of those too).