The problems result when investors buy a bond and want to sell it prior to maturity. Having the ability to redeem a CSB anytime and receive the full face value plus accrued interest is not how we define bonds. That is how we define cash. The rate payable is adjusted on a needs basis to reflect changes in the rate of interest being paid on savings accounts, one year GICs, short-term treasury bills and money market funds. Again, these are investment comparisons that we normally associate with cash assets.
Bonds are fixed-income instruments.
The coupon rate is simply the rate of interest the bond issuer promises to pay as a percentage of the bond's face value. Canada Savings Bonds CSBs are the safest and most liquid investment available in Canada today. They are unconditionally guaranteed by the Federal Government of Canada for payment of all accrued interest and repayment of the principal. They usually pay a rate of interest better than a savings account, and can be redeemed for cash at any bank, trust company or credit union. However, if you're considering cashing them, it is best to wait until the beginning of the month.