BMO InvestorLine offers a broad range of fixed income products which allows you, the investor to customize your portfolio to meet your individual investment objectives.

With our large selection, you can find Canadian or U.S. fixed income products that meet your goal of diversification, your need for a stable income stream, or if you simply want to capitalize on changes in interest rates or credit quality.

Provided below are descriptions of some of the products that BMO InvestorLine offers:

MARKET-LINKED PRODUCTS

Market-Linked GICS
Market-linked GICs provide you with the opportunity to earn potentially higher returns than those offered on traditional GICs, while maintaining the security offered through a guarantee on your principal investment.

Market-linked GICs appeal to security conscious investors who want upside potential without the downside risk. The upside potential of a market-linked GIC is usually tied to the performance of one or more stocks, mutual funds or stock indices. The unique risk-return profile offered by these investments is not easily attainable by retail investors.

MONEY MARKET PRODUCTS

Government of Canada T-Bills (GOC T-Bills)
GOC T-Bills are fully backed by the Government of Canada and are generally offered in 30, 60, 90, 180 or 360 day maturities. T-Bills are bought at a discount and mature at the stated face value. The minimum face value for purchase is $5,000 and in $1,000 increments thereafter.

Bankers Acceptances (BAs)
BAs are short-term debt obligations issued by non-financial institutions and "accepted" by the borrowers' bank (the interest and principal are guaranteed by the borrowers' bank). BAs are bought at a discount and mature at the stated face value. The minimum face value available for purchase is $50,000 and in $1,000 increments thereafter.

Commercial Paper (CP)
CP is a short-term promissory note issued by a major corporation. It is secured by the general creditworthiness of the issuer. CP is bought at a discount and matures at the stated face value. The minimum face value available for purchase is $50,000 and in $1,000 increments thereafter.

GUARANTEED INVESTMENT CERTIFICATES (GICs)

GICs
GICs are issued by chartered banks, trust companies, and mortgage and loan companies. Your principal from any one issuer is guaranteed by the CDIC for up to $100,000.

They range in maturities from one to five years and you may choose to receive interest payments in an annual, semi-annual, monthly or compound form.

Simple and convenient, BMO InvestorLine also offers a variety of 1 year cashable GICs, which are fully cashable (with accrued interest) after 30 days. Minimum purchase amount for cashable GICs is $10,000.

The minimum purchase amounts vary with the term to maturity as follows:

BONDS AND DEBENTURES

Federal and Provincial Government Bonds
Government bonds provide a regular, semi-annual income stream for investors.

Government of Canada (GOC) bonds offer the highest credit quality available in the Canadian bond market and have a very liquid secondary market. Within the provincial bond market, the creditworthiness and liquidity will vary with respect to the particular issuer.

Minimum initial investment is $5,000 face value and in $1,000 increments thereafter.

Visit Standard & Poor's and Dominion Bond Rating Service to look up corporate and Canadian government bond issuers' ratings.

Strip Coupons and Residual Bonds
Strips are created by separating the semi-annual coupons of a (usually Government of Canada or Provincial) bond from the principal, or face value. The two components are then traded on the open market separately with the former known as the "coupon" and the latter as the "residual".

Similar to T-Bills, strips are bought at a discount, mature at face value, and pay no interest during the term of the bond. While the absence of interest payments makes strip bond yields more sensitive to price fluctuations, they often generate slightly better returns than similar coupon-bearing bonds.

Strips also reduce reinvestment risk for the duration of the investment (i.e., the possibility that your coupon payments will not be reinvested at the same rate as your initial investment). If you hold your strip to maturity, the rate of return is determined at the time of purchase. The existence of reinvestment risk is the reason why coupon-bearing bonds are quoted in semi-annual yields and strips are quoted in annual yields.

Strips are geared towards investors who want to lock-in their rate of return with minimal risk. Since investors who hold strip bonds are responsible for the tax on the annual interest which accrues (but is not paid), strips may be more suited for tax-deferred accounts such as RRSPs and RRIFs.

For your convenience, BMO InvestorLine offers government-guaranteed strip bond packages. These packages consist of five strips from the same issuer, with the strips laddered to mature on the same day of every year for a period of five years. Each strip has a face value of $1,000 with a total package face value of $5,000. The staggered maturity of the strips minimizes reinvestment risk from the year-to-year fluctuation in interest rates.

Minimum initial investment is $5,000 face value and in $1.00 increments thereafter.

Corporate Bonds
Many corporate bonds are issued with special features - for example, a "callable" bond or a "convertible" bond.

A callable bond contains a provision which gives the issuer the right to retire the bonds on a specified future date. When the bond is called for redemption, its yield is affected. In addition to the bond's yield-to-maturity, you may also want to be aware of its yield-to-call. In certain situations, the yield-to-call may be a better indication of the likely yield that you will receive as an investor.

Since the call provision can impact the maturity and the yield of the issue, these callable issues generally provide slightly higher yields than a comparable straight issue.

A convertible bond allows the bondholder the option of converting the bond into the underlying stock of the company. This feature provides an added incentive by allowing the investor to participate in the movement of the underlying stock. However, having the right to convert the bond is usually at the cost of a lower yield relative to a comparable straight bond.

Corporate bond yields will vary depending on the credit rating of the issuer, the term-to-maturity and any inclusion of the above special provisions. In general, corporate bonds are less liquid than government bonds due to the relatively smaller amount of outstanding issues.

Minimum initial investment is $5,000 face value and in $1,000 increments thereafter.