The amount of five-year private investment government bonds, which has been gaining popularity since its launch, will be expanded to 70 billion won next month.
The Ministry of Strategy and Finance announced on the 28th that it will issue 120 billion won in government bonds for personal investment next month.
By stock, there are 70 billion won on 5-year, 40 billion won on 10-year, and 10 billion won on 20-year. The five-year, which was first released this month, saw its issuance increase by 10 billion won from 60 billion won.
The surface interest rate is 2.68% on 5-year, 2.83% on 10-year and 2.7% on 20-year. The additional interest rate is 0.35% for 5-year and 10-year and 0.5% for 20-year. The pre-tax yield on holding until maturity is 16% on 5-year, 37% on 10-year, and 88% on 20-year.
The government decided that there was sufficient demand for five-year supplies, so it expanded the issuance volume.
The five-year-old recorded a competition ratio of 1.453 to 1, attracting 115 billion won in subscription for 60 billion won this month. As a result, 79 billion won was allocated, more than originally planned.
However, demand for long-term bonds such as 10-year and 20-year bonds is insufficient.
Ten-year bonds fell to 0.29 to 1 in September last year and have been undersubscribed for five consecutive months so far this month. The 20-year-old has also been falling short for eight consecutive months since its launch.
The government launched five-year short-term products starting this month and increased the purchase limit per person from 100 million won to 200 million won per year after failing to hit the box office after issuing government bonds for personal investment last year.
Government bonds for personal investment are products that are subject to surface interest rates, additional interest rates, and annual compound interest rates if held until maturity.
Interest income is separately taxed at 14% up to 200 million won in purchases, making it free from comprehensive financial income taxation.
However, principal and interest are paid at the same time on the maturity date. In addition, transactions in the market are not possible, and only interim redemption is possible one year after joining.
