The Ministry of Finance announced on July 29 that it will issue personal investment bonds worth 150 billion won next month.
The issuance limits by type are 30 billion won for 3-year coupon bonds, 70 billion won for 3-year compound interest bonds, 700 billion won for 5-year bonds, 500 billion won for 10-year bonds, and 200 billion won for 20-year bonds.
The coupon rates will be based on the successful bidding rates of government bonds issued in July. The rates are 3.765% for 3-year bonds, 4.165% for 5-year bonds, 4.255% for 10-year bonds, and 4.530% for 20-year bonds.
Additional rates will be added: 0.05 percentage points for 5-year bonds, 0.5 percentage points for 10-year bonds, and 0.4 percentage points for 20-year bonds. No additional rate will be applied to 3-year bonds, considering the yields of financial market products.
If held to maturity, the pre-tax yields are approximately 11.3% for 3-year coupon bonds, 11.7% for 3-year compound interest bonds, 22.9% for 5-year bonds, 59.1% for 10-year bonds, and 161.8% for 20-year bonds.
When converted to annual average yields, the rates are 3.8% for 3-year coupon bonds, 3.9% for 3-year compound interest bonds, 4.6% for 5-year bonds, 5.9% for 10-year bonds, and 8.1% for 20-year bonds.
Subscriptions will be accepted from August 10 to 14, from 9 a.m. to 4 p.m. on business days. Individual investors wishing to purchase can apply at Mirae Asset Securities branches or through their website and mobile application.
The minimum subscription amount is 100,000 won, and it can be increased in increments of 100,000 won. The maximum annual purchase limit per person is 200 million won.
If the total subscription amount is within the issuance limits for each type, the full amount applied for will be allocated. If the total exceeds the limits, all applicants will receive priority allocation of up to 3 million won, with the remaining amount distributed proportionally based on the subscription amounts.
Personal investment bonds issued from June 2024 to July of last year can be redeemed early in August. However, early redemption will only yield the principal and simple interest based on the coupon rate at the time of purchase, without the benefits of compound interest or separate taxation on interest income. The limit for early redemption is set at 12.008 trillion won.
* This article has been translated by AI.
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