“There was a year-on-year increase in the volume of subscriptions of approximately 45 percent. The bond of the Republic is consistently very popular, “said Šimon Blecha, spokesman for the Ministry of Finance, for Právo.
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There are two types of savings bonds, reinvestment and anti-inflation. According to analysts, the latter is more attractive to people. A six-year anti-inflation bond offers a yield 0.5 percent above average inflation in a given year, for example, with three percent inflation, the yield is 3.5 percent per year. This is more than offered by most bank savings accounts, and comparable to the yield of, for example, building savings with a state contribution.
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“The interest may probably be related to the efforts of many households to invest their free funds in inflation-protected assets, which can be seen in a number of other areas of the economy, such as the record interest in acquiring real estate. However, this trend is to a large extent also evident in a number of other countries, where concerns about future inflation growth are increasing, “ING economist Jakub Seidler told Práva. Inflation in the Czech Republic now climbs above three percent and makes practically everything more expensive. This means that savings held in current bank accounts, for example, are depreciating at a relatively fast pace.
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“Government bonds can be described as a basically risk-free way to save your money and, to a certain extent, to fight rising inflation. It is obvious that the government bond will not achieve returns on other and more risky investment instruments, “said Roklenu’s chief economist Pavel Peterka. Such a variant is mainly shares or equity funds.
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Bond of the Republic
Photo: sporicidluhopisycr.cz
“However, during a global pandemic, with thousands of people dying and hundreds of businesses going bankrupt every day, it is natural to look for low-risk investment instruments,” the analyst added. To a certain extent, according to him, the growth of interest could also be reflected in the solidarity of citizens with the state, which significantly increased its debt in the fight against the economic effects of the pandemic.
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Despite the jump, however, the record did not fall last year. During the pilot issue of bonds for citizens under former Minister of Finance Miroslav Kalousek in 2011, they were sold for 20.4 billion crowns, while the 2012 Christmas issue with 30 billion still holds the record.
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People can buy savings bonds for at least 1,000 crowns. However, due to the entry fees of CZK 250 (double for donations), it is not worthwhile to invest such a low amount. The upper limit for one natural person is five million CZK.
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