Recently, netizens have been paying attention to the issuance of 1 trillion special ultra-long treasury bonds by the Ministry of Finance. 1 trillion? It sounds like an astronomical number, but what the hell is going on?
Let's take a look at what is a national debt?
Treasury bonds, also known as state public bonds, are bonds issued by the state on the basis of its credit and in accordance with the general principles of bonds and by raising funds from the society.
Generally, the maturity of the issuance is more than 10 years, which is called ultra-long-term treasury bonds. The maturity of the special long-term treasury bonds issued this time is indeed very long, ranging from 20 years, 30 years, and even as long as 50 years.
Can the public buy it?
In the current environment of declining interest rates, I believe many people must be wondering if they can take this opportunity to buy these treasury bonds once and for all, so as to obtain long-term stable income?
Unfortunately, the ultra-long-term treasury bonds were not issued to ordinary individual investors, but were mainly sold to banks, insurance and other financial institutions for use as underlying assets.
Therefore, many experts' previous interpretations were not accurate, just like the 1 trillion special treasury bonds for epidemic prevention issued in 2022, they are not aimed at ordinary people.
Abroad, this special long-term treasury bond is also not open to individual investors. For example, the 10-year Treasury bond in the United States, when the Federal Reserve raised interest rates wildly in the past two years, the coupon rate was as high as 5%, but ordinary Americans can only buy inflation-linked savings bonds I-Bond, although the yield is also good, but this is not a standard 10-year Treasury bond.
What will be the interest rate on these ultra-long-term special government bonds?
According to experts' estimates, their coupon rates may only be a little higher than the one-year fixed deposit rate of the current bank, and not too high.
At present, the interest rate on one-year bank deposits is around 1.5%, and the interest rate on one-year and three-year government bonds issued in 2024 will be up to 2.5%, so the interest rate on special government bonds may only hover around 2% this time.
In the future, as interest rates continue to fall, the yields of these ultra-long-term treasury bonds will become more and more attractive, and they are likely to be favored by financial institutions such as banking and insurance as the underlying assets of wealth management products for long-term allocation.
What is the impact on our people?
For us ordinary people, although we have no chance to directly purchase these special treasury bonds, their issuance also gives us some enlightenment.
For example, the deposit rate is likely to fall rapidly in the future, so how to invest the money in our hands is the wisest choice?
Industry insiders suggest that under the current trend of downward interest rates, you may wish to consider buying some insurance products and using the existing higher interest rates to lock in. The cash value of such products is already specified in the contract, and the future income is relatively stable; And a one-time payment can benefit you for life, just like buying an ultra-long-term treasury bond.
Of course, insurance products also have certain drawbacks, such as the flexibility may not be as high as that of government bonds, and some management fees will be charged. However, it is a relatively safe option compared to keeping money in the bank or making high-risk investments.
Another option is to wait for the future of long-term Treasury bonds to be traded in the secondary market, when the price of these long-term bonds will rise if interest rates continue to fall.
At that time, even if ordinary investors cannot subscribe directly, buying long-term bonds in the secondary market is a good choice, as long as you have sufficient risk tolerance.
Although the Ministry of Finance's issuance of special ultra-long-term treasury bonds is only for institutional investors, it reflects some potential signals that are also of great reference value to ordinary people.
You may wish to grasp the current opportunity and rationally allocate assets in order to achieve long-term steady appreciation of wealth.