The April issue of Forbes investigates whether the new 2-year government security is a better investment than the popular inflation-indexed bonds. The winner is still the inflation-indexed bond with 4.05 interest which could even increase next summer.
Last week, the Government Debt Management Centre (ÁKK) has announced that they’re offering 2.5pc interest on the new 2-year government security. Since inflation is rising at least 2.5pc annually, the 2.5pc on the new 2-year bond, together with interest tax, is not the best investment.
As for the winners, interest on the Premium Government Bond is calculated as a sum of a variable interest base and the interest rate premium (akk.hu). The 2.75 and 3.25pc premium on the previous series was so profitable that its trading was finished at the beginning of the year and a new series has been issued. The 3-year bond is called 2020/K, and the 5-year bond is called 2022/l. The interest rate premium is 3.55pc on the 3-year bond and an unsurpassable 4.05 on the 5-year security.
You can read more about the Hungarian government securities in English here.