Here is how to buy the traditional instrument of financing military operations in Ukraine
The Ukrainian government has employed numerous creative methods to save its economy from collapse amidst the war. Namely, innovative means of additional financing (such as crypto and NFT) are combined with the usage of good old war bonds.
The Ukrainian Ministry of Finance has recently issued war bonds that pay interest of 10-11%. Each one-year bond has a nominal value of 1,000 Ukrainian hryvnias (£24.80; $33.27). The bonds range from short-term to long-term ones (from several months to several years).
Their actual price may be a little lower depending on the type of bond. At the same time, some banks may charge additional commission fees for handling securities. War bonds are sold both in UAH and USD/EUR. The proceeds from the sales of these bonds go to the needs of the Ukrainian Armed Forces.
Many people around the world have flooded social media, eager to buy some of the national debt securities from the Ukrainian government. Although at first they were available to institutional investors, now every individual can buy war bonds to support the Ukrainian army.
Ukrainian citizens can perform purchases online via the official banking websites. However, some banks may have limitations regarding the minimal purchase sum. For instance, Oschadbank has set a minimum limit of 50,000 UAH for the war bonds, while PrivatBank and KredoBank allow investing sums above 100,000 UAH. Some other banks like Tascombank or Raiffeisen have even higher buying limits.
At the same time, Ukrgasbank, Alfa-bank, Ukreksimbank, PUMB, Pivdennyi and some other financial institutions and brokers allow you to buy as little as one war bond.
The government bonds are sold via regular auction sales through the National Bank of Ukraine (NBU). You can find the schedule of the planned auctions at the website of the Ministry of Finance. Yields at auctions are usually higher than yields on the secondary market.
Buying a war bond requires opening a fiat current account and a special bank account for securities. As for the documents, individuals should provide a personal ID and taxpayer ID. Institutions will need additional documents. Special requirements also may apply to non-resident buyers.
The procedure is quite simple:
- Open a securities account.
- Sign a brokerage agreement.
- The bank purchases bonds on your behalf and places them into your account.
- You can later sell your war bonds on the secondary market or use them as a collateral for a loan.
- You pay no income tax on the interest you get.
As many banks allow only large sums to be spent on war bonds, such transactions may require the assistance of a personal manager. Some institutions also accept purchase requests only offline at a branch. Customers should contact their bank for details. Useful links with fees and conditions from the leading Ukrainian financial institutions can be found here:
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FAQs
How to purchase
- Complete KYC documents and get Ukreximbank's e-signature to sign all further documents online.
- Contact International Business team for a brokerage agreement template and sign it online.
- Make an online order to Ukreximbank to purchase Ukrainian Government Bonds at primary or secondary market.
Unlike residents of Ukraine, who can pay for war bonds denominated in hryvnia only in hryvnia, non-residents can pay for war bonds denominated in hryvnia, both in hryvnia and in foreign currency. In addition to hryvnia war bonds, investors can purchase military bonds denominated in foreign currency.
Where to buy Ukraine sovereign bonds? ›
How to purchase a Ukraine Sovereignty Bond
- BMO Nesbitt Burns Inc. ...
- BMO Wealth Management.
- CIBC World Markets Inc. ...
- Desjardins Wealth Management.
- Laurentian Bank Securities Inc.
- National Bank Financial Inc. ...
- RBC Dominion Securities Inc. / ...
- Scotia iTrade.
As for what you pay upfront, you typically buy a war bond for somewhere between 50% and 75% of the face value of the bond. They are zero-coupon bonds: Unlike standard savings bonds, war bonds are zero-coupon bonds, which means they do not make interest payouts throughout the term.
What is the interest rate on Ukrainian bonds? ›
The Ukraine 10Y Government Bond has an estimated 22.863% yield. Its value is not derived from the market, but it's calculated according to the yields of other available durations. Central Bank Rate is 25.00% (last modification in June 2022). The Ukraine credit rating is CCC, according to Standard & Poor's agency.
Can Americans buy Russian bonds? ›
According to OFAC's update, US market participants are prohibited from purchasing both new and existing debt and equity securities issued by a Russian Federation entity. But investors can still sell such assets, or facilitate their sale, to non-U.S residents and may continue to hold them.
Are war bonds a good investment? ›
The Bottom Line
War bonds allow a country to raise emergency funds to support military expenditures, at a lower cost than a typical sovereign bond issue. However, there is risk involved. War bonds tend to offer a lower yield, and investors assume the risk that they may lose the investment if the country defaults.
Does the US still sell war bonds? ›
Key Takeaways
Therefore people buy them mostly for sentimental reasons. Governments used propaganda to convince people to buy them throughout history. While war bonds are not being sold anymore, you can still find savings bonds that work similarly today. The U.S. currently sells EE bonds online.
Can US residents buy I bonds? ›
U.S. individuals or U.S. entity account managers who are at least 18 years of age with a valid Social Security Number can purchase EE and I bonds in TreasuryDirect. An entity for which bonds are purchased must have a valid Social Security Number or Employer Identification Number.
Which country Government Bonds are best to buy? ›
Government Bonds With High Interest Rates
- Argentina. Government Bond Interest Rate: 26.2% (One year) ...
- Bahrain. Government Bond Interest Rate: 6.4% (Two years) ...
- Brazil. Government Bond Interest Rate: 9.4% (Two years) ...
- Egypt. Government Bond Interest Rate: 19.4% (Six months) ...
- India. ...
- Kenya. ...
- Namibia. ...
- Turkey.
Go to www.treasurydirect.gov and use the Savings Bond Calculator. Each year, buy as much as $10,000 of electronic Series I, $10,000 of electronic Series EE, and $5,000 of paper Series I. Earn interest for up to 30 years. Redeem anytime after 12 months.
How do I buy foreign currency bonds? ›
You can use local brokers who offer a wide range of foreign bonds and personalized financial advice. Online trading platforms provide access to multiple foreign markets with lower fees. Exchange-Traded Funds (ETFs) and mutual funds offer diversification and professional management.
How much is a $10,000 savings bond worth? ›
A $500 Series EE savings bond is worth $1,000, if you hold it for 20 years. A $10,000 bond is worth $20,000 after 20 years.
How to buy Treasury bonds online? ›
TreasuryDirect.gov website
Log on to your TreasuryDirect account. Create a new account in TreasuryDirect so you can buy and manage Treasury savings bonds and securities.
How do you cash in war savings bonds? ›
Bondholders have two options for cashing in paper Series E bonds. You can visit certain local financial institutions that are authorized to handle savings bond transactions. Alternatively, you can mail them to the Treasury Retail Securities Site. Contact information is available at the TreasuryDirect website.
How to buy bonds from other countries? ›
Interested investors can buy foreign government bonds through local brokerages, online trading platforms, or directly from other countries. These securities can also be accessed as part of ETFs and mutual funds.
Does Ukraine have bonds? ›
Ukraine has roughly $20 billion worth of international market bonds. Most governments have suspended its bilateral repayments to them too, but the cost of the war and hit to its economy means a restructuring of its borrowings will be needed.
How do Ukrainian war bonds work? ›
A war bond is essentially a debt instrument issued by the Ukrainian government, to help finance its military operations against Russia. These bonds make emotional appeals to patriotic citizens to lend money to the government. Previously, the U.S. had issued such bonds (termed as Liberty Bonds) during the world wars.
How to buy Government Bonds online? ›
TreasuryDirect.gov is the one and only place to electronically buy and redeem U.S. Savings Bonds. We also offer electronic sales and auctions of other U.S.-backed investments to the general public, financial professionals, and state and local governments.
