Latvians' interest in savings bonds grows

Take note – story published 1 year ago

Although Latvian residents have been able to lend money to the country through savings bonds, this type of investment has only recently gained popularity. With changes in financial markets, deposit rates have become more interesting, but also, unlike deposits in a bank, when lending to the State, there is no need to pay taxes, Latvian Television reported on June 18.

Demand for savings bonds ncreased significantly this year. At the beginning of this year, private individuals had savings bonds worth around €15 million. At present, however, this figure has increased more than seven times, reaching €107 million. The number of investors has also increased, indicates the State Treasury.

“If, at the beginning of the year, it was a few hundred who owned the bonds, we can already talk about thousands,” said Jēvgēnija Jalovecka, director of the Treasury's Department of Financial Resources.

The reason for the great interest of the population is simple. Their rates have increased, which means investing money in this financial instrument is becoming more profitable. Among Latvian residents, the most popular term for deposits is one year, and the possibility of depositing for three years is also actively used.

“Of course, those citizens who want to set the attractive rates for the longer term are also choosing five, seven, and ten year deadlines,” said Jalovecka.

Investments in savings bonds can be made by every resident of Latvia.

Jalovecka also noted: "What is still important is that no taxes are paid for the interest received. Nor does the State apply any commission or additional costs when purchasing a person's savings bonds."

The minimum deposit is relatively small at €50. At present, the average amount of deposits is well above €20,000.

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