Mirae Asset Securities announced on the 11th that the subscription for individual investor government bonds in February will be conducted from the 13th to the 17th. The issuance limit for individual investor government bonds in February is a total of 100 billion KRW, with 80 billion KRW for 10-year bonds and 20 billion KRW for 20-year bonds.
The interest rate applied when held to maturity for the 10-year bonds is a coupon rate of 2.840% plus an additional rate of 0.35%, providing a pre-tax annual interest rate of 3.190% when held to maturity. For the 20-year bonds, the coupon rate is 2.770% plus an additional rate of 0.50%, offering a pre-tax annual interest rate of 3.270% when held to maturity. Individual investor government bonds also apply compound interest on the additional rate when held to maturity, so holding the 10-year bonds until maturity can yield approximately 37% pre-tax (an average of 3.7% per year), and holding the 20-year bonds until maturity can yield about 90% (an average of 4.5% per year).
Individual investor government bonds began their first subscription in 2025 last month. Looking at the subscription amounts, investments of 50 million KRW or more accounted for 69.6 billion KRW, which is 80% of the total subscription amount. This is analyzed to be because wealthy investors actively utilize these investment conditions from the beginning of the year, as the government guarantees principal and interest, and offers benefits such as additional interest rates when held to maturity and separate taxation (tax-saving effects).
While market interest rates are declining due to the possibility of further base rate cuts by the end of this year, the issuance interest rate for individual investor government bonds in February increased compared to the January issuance.
A representative from Mirae Asset Securities said, “Individual investor government bonds are a stable investment tool that also provide additional interest rates and separate taxation benefits to individual investors when held to maturity. Investors considering long-term investment alternatives in a declining interest rate environment should pay close attention to individual investor government bonds.”
Starting in March, 5-year government bonds will be newly issued, and the purchase limit per person is expected to increase from the current 100 million KRW to 200 million KRW.
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