2 Trillion Won in Government Bonds for Individual Investors to Be Issued Next Year... 140 Billion Won Scheduled for January

The Ministry of Economy and Finance announced on December 30 that it plans to issue 2 trillion won worth of government bonds for individual investors in 2026, with 140 billion won scheduled for issuance in January.

The 140 billion won to be issued in January will be divided into 90 billion won in 5-year bonds, 40 billion won in 10-year bonds, and 10 billion won in 20-year bonds, the same as in November. The coupon rates will be set based on the winning bid rates of the same maturities issued in December (3.245% for 5-year bonds, 3.410% for 10-year bonds, and 3.365% for 20-year bonds), with additional spreads of 0.3% for 5-year, 1.0% for 10-year, and 1.25% for 20-year bonds. The yield applied at maturity, which combines the coupon rate and the spread, will be 3.545% for 5-year bonds, 4.41% for 10-year bonds, and 4.615% for 20-year bonds.

Accordingly, the pre-tax yield at maturity (compounded annually at the applicable rate) for government bonds for individual investors to be issued in January next year will be 19% for 5-year bonds (annual average yield of 3.8%), 54% for 10-year bonds (annual average yield of 5.4%), and 147% for 20-year bonds (annual average yield of 7.3%).

The subscription period will run from January 9 to 15, from 9 a.m. to 4 p.m. on business days. Individual investors wishing to purchase can apply during this period by visiting a branch of the designated sales agency (Mirae Asset Securities) or through online channels (website, mobile app).

Meanwhile, in January, it will be possible to redeem early government bonds for individual investors issued over the seven months from June to December 2024 (up to a total of 713.1 billion won). However, in this case, only the principal and interest based on the coupon rate at the time of purchase will be returned; compounded interest including the spread and benefits such as separate taxation on interest income will not be available.

Additionally, the Ministry of Economy and Finance will significantly improve the government bond system for individual investors to further boost participation. In April next year, a 3-year bond with a shorter maturity than existing products will be introduced, and the spreads for 10-year and 20-year bonds will be increased to more than 1 percentage point to provide higher investment returns. In the second half of the year, individual investors will also be able to purchase 10-year and 20-year government bonds for individual investors through their retirement pension accounts (DC type and individual IRP).