The Ministry of Finance has started selling military bonds in Ukraine. With these funds, the state will replenish the budget to support the economy, and especially— to support the army, the Ukrainian government press service informs.
The Finance Ministry has already held two auctions for the sale of such bonds, but they were bought mostly by Ukrainian banks. The third auction continues on March 22.
What are military bonds?
They are a special type of government bond that is issued during the war to support the economy. In fact, the state borrows money from its citizens during the war, guaranteeing the return of these funds in the future.
The main feature of these bonds in their intended purpose is specifically to support the defense capabilities and functioning of the state in wartime. Also, the value of such bonds is usually much lower than traditional ones in order to attract as many people to invest as possible. The issuance of military bonds during the war is common for states, as countries did during the First and Second World Wars.
What are the guarantees from the state?
Government bonds work on the same principle as a bank deposit — but the guarantor is the state, not the bank. Ukrainian military bonds are sold at an annual rate of 11%, there are also short-term, for several months, but with a lower rate. The value of one bond is UAH 1,000. The state guarantees that after the war it will be sure to return interest to all bondholders. In general, Ukraine plans to raise about 400 billion hryvnias through military bonds (about a third of the Ukrainian state budget).
Where and how can they be purchased?
To maximize the involvement of citizens in the purchase of military bonds, many banks and brokers have significantly simplified the registration and investment process, as well as published clear instructions on how to buy bonds. Some also offer bonds in US dollars with a different interest rate. Here is a list of financial institutions where you can buy bonds:
Purchase of bonds with the minimum amount of UAH 1,000
Purchase of bonds from UAH 50,000
Purchase of bonds from UAH 100,000
Purchase of bonds from UAH 500,000