Sep. 9, 2019
General

Do you have cash that is being retired?

Image Source: Bank of Canada

Do you have cash that is being retired?

Spend it, redeem it, or add it to your collectibles.

On January 1, 2021, the Government of Canada will remove the legal tender status from the $1, $2, $25, $500 and $1,000 bank notes, that are no longer being produced.

You will always be able to bring them in to Fusion

“These bills will still hold their face value, but you won’t be able to use them to pay bills or buy things,” says Kelly Brook, Chief Financial Officer, Fusion. “If you have any of these bills that you want to redeem, you will always be able to bring them in to Fusion, or send them to the Bank of Canada to redeem their face value.”

Every bank note issued by the Bank of Canada since they opened in 1935 is still redeemable at its face value. Technically, until January 2021, you can use a 1935 $25 bank note when you go shopping or pay a bill and it is worth $25. In fact, some bank notes, especially the rare ones, are worth more than the number on their face to collectors.

The Government of Canada now has the power to remove legal tender status from bank notes — something it could not do before.

“Bank notes issued by the Bank of Canada, together with coins issued by the Royal Canadian Mint, are what is known as ‘legal tender’. That’s a technical term meaning the Government of Canada has deemed them to be the official money we use in our country. In legal terms, it means “the money approved in a country for paying debts,” adds Kelly.

“Today, money takes many different forms: credit cards, debit cards, cheques, and contactless payments using mobile devices. You can pay with any of these forms of money, even though they are not considered ‘legal tender’. In fact, anything can be used if the buyer and seller agree on the form of payment. So ‘legal tender’ has little impact on our everyday lives.

The Bank of Canada says that removing ‘legal tender’ from the old bills keeps the bills that are in circulation current. Newer bank notes have better security features that make them difficult to counterfeit, and they are in better condition overall.

So, which bills are being removed from legal tender?

  • The $1 and the $2 notes stopped being issued in 1989 and 1996, respectively, and were replaced with coins.
  • The $25 note was a commemorative note. Both it and the $500 note were discontinued shortly after they were issued in 1935.
  • The $1,000 note stopped being issued in 2000.

“For now, the government has indicated it has no plans to take any other bank notes out of circulation,” adds Kelly. But with this new legislation, they will be able to remove other notes in the future as needed. If that happens, we will keep our members informed.