Mirae Asset Securities Holds Online Seminar on 'Government Bonds for Individual Investors'

Mirae Asset Securities announced on the 3rd that it will hold an online seminar titled '[Investment Item] Korea offers it all to the entire nation. Government Bonds for Individual Investors!' at 6 PM on the 9th. Mirae Asset Securities is the exclusive sales agency for government bonds for individual investors, a savings product guaranteed by the government.

[Image source=Yonhap News]

Government bonds for individual investors, which residents including minors can easily invest in, are scheduled to be launched in June. These bonds aim to provide a new form of stable ultra-long-term investment and support asset formation for individuals’ retirement preparation.

They offer various benefits such as additional interest rates upon maturity, annual compound interest, and separate taxation on interest income. Issued monthly with 10-year and 20-year maturities, they can be purchased through subscription rather than market trading, with a minimum purchase of 100,000 KRW and a maximum annual purchase limit of 100 million KRW.

The total issuance volume for this year is 1 trillion KRW, with subscriptions accepted monthly from June to November. This averages about 166.6 billion KRW per month. Allocation based on subscriptions is done within the monthly issuance limit per bond type. If the total subscription amount is within the monthly issuance limit, full allocation is granted. If the total subscription amount for a bond type exceeds the monthly limit, a standard amount of 3 million KRW is allocated first. If the total amount allocated by priority exceeds the monthly issuance limit for that bond type, the standard amount may be adjusted in units of 100,000 KRW.

The greatest advantage of government bonds for individual investors is their safety. As government bonds literally mean 'bonds issued by the state,' their safety is extremely high due to government backing. Usually, higher safety might mean lower interest rates, but assuming holding until maturity, the interest rates on these bonds are quite favorable. The bonds apply compound interest on both the coupon rate and additional interest rate. The coupon rate is based on the previous month’s 10-year and 20-year treasury bond auction rates, and the additional interest rate is determined by the government considering market conditions. Therefore, the yield increases when calculated with annual compound interest upon maturity.

One consideration when investing is that early redemption is not allowed within one year of purchase. After one year, investors can apply for early redemption through the sales agency. There is a monthly limit on the amount available for early redemption, and it operates on a first-come, first-served basis, so early redemption is not always guaranteed. Early redemption applies simple interest on the coupon rate and does not benefit from separate taxation. Additionally, government bonds for individual investors cannot be used as collateral for loans or pledged, so investors who may need to recover their investment mid-term should be cautious.

Government bonds for individual investors can be received either as a pension or lump sum after purchase, providing a long-term investment tool to secure personal retirement income. Therefore, investors should select bonds that match their investment goals and financial situation and make careful investment decisions.

Moreover, these bonds offer a tax-saving benefit with separate taxation (14%) on interest income up to a total purchase amount of 200 million KRW, making them an attractive option for reducing taxes. Because of this, banks and other securities firms that cannot sell these bonds are wary of the product.

A representative from Mirae Asset Securities stated, "Ahead of the launch of government bonds for individual investors, many customers have been inquiring about the product through the dedicated consultation center and branches. We expect the nationwide video content to accurately highlight key points and provide a refreshing Q&A session to address customers’ questions."

This online seminar on government bonds for individual investors is open for pre-registration until the 8th on the newly launched live streaming channel 'M-PLAY' within the Mirae Asset Securities mobile app M-STOCK, available to all Mirae Asset Securities customers.