The one-year state bond that Belgium's Debt Agency will issue on 4 June will have a gross yield of 3.2%, which amounts to 2.24% net. This makes it an "interesting investment," but does not necessarily bring big competition for banks.
Both state bonds – with either one-year maturity or eight-year maturity – will be subject to the usual withholding tax of 30% – not the reduced one of 15% as was the case for the special (and therefore, very successful) state bonds issued last summer.
The one-year state bond will have a gross return of 3.2% (2.24% net interest), while the eight-year bond will have a gross return of 2.8% (1.96% net interest). "Compared to traditional savings accounts, the net interest on the one-year bond is higher," financial journalist Steven Rombaut told VRT.
While a classic savings account without special conditions usually yields a higher interest (maximum of 2.5% to 2.85%), this interest is not guaranteed because banks can lower the savings interest rate at any time – such as when the European Central Bank (ECB) cuts its interest rates, for example.
State bonds vs savings certificates
Following the success of Belgium's "special" state bonds (which had an effective interest of 2.81% after taxes, and were therefore very popular), some banks recently started offering savings certificates again.
"You can compare that with a state bond. But with a savings certificate, you do not lend your money to the government, but to the bank itself," said Rombaut. "At Belfius and BNP Paribas Fortis, the one-year savings certificate offers a net yield of 2.1% – a little less than the one-year state bond."
Subscribing to the state bonds can be done via the banks from Friday 24 May to Monday 3 June. People who do not want to go through their bank can also subscribe directly at the Debt Agency, via the General Ledger, from Friday 24 May to Friday 31 May.
