A significant return of around 3%, in contrast with the essentially zero returns on bank deposits, is expected to be achievable by households and individuals in general through the interest-bearing bonds of the Greek Government, which can be obtained from banks and brokerage firms. On June 5th, the Greek State will issue annual interest-bearing promissory notes aiming to raise 500 million euros, a relatively smaller amount compared to previous issuances. Alongside the auction, natural persons will also have the opportunity to purchase these securities through a public registration in any bank or stockbroking company, with a maximum nominal value of 15,000 euros per individual. The purchase price will be the last bid accepted at the auction (cut-off price).
The total amount of securities allocated through this process will be announced after the public registration is completed. The registration period begins today, June 4, 2024, and ends on Thursday, June 6, 2024. The estimated yield of around 3% comes from market analysts who suggest that such returns may not be seen again for some time. They note that the ECB may reduce its interest rates after a period of strengthening them starting in the summer of 2022.
The interest rate was set at 3.73% in the previous auction held on March 6, 2024. However, the government’s request for a smaller amount will likely impact the final returns. One important condition for purchasing these securities is their registration in a portion of the Intangible Securities System (SAT), which can be arranged through the relevant distribution agencies with the necessary documentation, identification, and VAT number. Bonds are an investment option that can provide investors with a fixed income over a specific period. Essentially, investors lend money to a government, municipality, or company with a promise to receive the principal amount invested back, along with interest, at a later date.
Opening the participation to natural persons allows small depositors to engage in auctions of interest-bearing promissory notes conducted by the State, up to 15,000 euros per individual. This means there are no registration restrictions for upcoming interest note issuances. The 15,000 euro limit applies per issuance ISIN and VAT number, as per reliable sources. The elimination of the 15% tax on government bond yields serves as an additional incentive for these investments, solidifying government bonds as an alternative savings option.
The Process: Acquiring interest-bearing Greek Treasury bills is a simple process. Interested buyers can register for interest auctions at banks, submit the required documents and authorizations for investment transactions, and commit a minimum of 15,000 euros for primary market participation. Alternatively, investors can buy securities through banks without participating in auctions, following standard practices including factoring in the cost of commissions. This allows them to purchase a new bond with the same, longer, or shorter duration, securing a yield at maturity matching the interest rate of the initial issue. Registration in the Intangible Securities System portion is mandatory for purchasing these securities and can be facilitated at banks or brokerage firms with appropriate documentation, identification, and VAT number.
