Federal loan bonds are a great alternative to a bank deposit. At least, the government of the Russian Federation is trying to convince us of this - recently it has been trying to intensify the activity of the population when investing in securities. Is this really so? How to buy OFZ to an individual?
What is OFZ?
The abbreviation stands for federal loan bonds. In fact, this is a debt receipt of the government of the Russian Federation.
The bond itself resembles a bank deposit - the same fixed interest at the end of the term. However, unlike a deposit, you can sell a bond or give it to another person - through the intermediary of the same broker from whom you bought it. And interest will not be lost (except for the broker's commission). Accordingly, the closer the debt repayment period, the more expensive the bond will cost.
The bond gives the holder the right to receive guaranteed income in the future. Moreover, the guarantor is the issuer - the person who issued the bonds. In this case, the government of the Russian Federation acts as a guarantor - it wants private individuals to buy as much OFZ-n as possible. As everything was in 1998, many still remember - then a default occurred and the country refused to pay for its obligations.
Should an individual buy OFZ bonds? What if the situation repeats itself? But, according to experts, such a risk exists. The peak of the crisis in the Russian economy will be in 2020-2022.
Give an example
Let OFZ cost 100 rubles and guarantee 30% of income in 5 years. Then, at the time of issue - issue, its yield will be 6% per annum. However, if you purchase it after 4 years, then with the same parameters, the yield will already be 30% per annum. Accordingly, the bond itself will cost 5 times more.
This is a very simplified option. In fact, many factors influence the price of a bond. If the situation in the economy is such that the likelihood of the government declaring a default approaches 100%, it will be almost impossible to sell the bond. Accordingly, its price will fall to almost zero. If, after all, no default is declared, he who dared to buy such bonds for nothing will become a millionaire.
But for such transactions you need to have inside information - insider information. It should only be remembered that transactions with securities based on insider information are considered illegal in many countries of the world and are a violation of the law. And Russia is no exception.
Bond characteristics
Before you plan how to buy OFZ to an individual, you need to figure out what they are.
For each bond, and OFZ is no exception, there are 4 main characteristics: market price, maturity, coupon size and face value.
Let's start with the simplest - face value. When the OFZ issue occurs, each of them has its own face value - the value that the investor will receive when the debt is returned. In addition to it, the investor will receive a certain interest income - a coupon. Coupon payments are made once a month, once a quarter, or once a year. Hence the expression "cut coupons."
This is similar to dividends on shares, but here the investor knows in advance the coupon yield on OFZs - the percentage is fixed, like on a bank deposit.
However, as can be seen from the example above, a bond is not always purchased at a nominal price. At present, its market value may be higher or lower than face value.
It depends on the general economic situation in the world, the reliability of a particular issuer and its financial situation.
After 1998, the authority of the state greatly “sagged”. Now his bonds are cheaper than they could.And all because fewer people want to purchase them. This is the situation that the government has been trying to break recently.
As for the maturity, then everything is similar to a bank deposit - the money will be returned to the investor on a certain day, which is known in advance. Or the government will default again, which is also possible. But suppose you are interested in entrusting money to your native state.
And yet how to buy OFZ to an individual?
OFZ for the "private trader": step-by-step purchase instructions
Buy OFZ to an individual, as well as open a deposit, is easy. No special knowledge or insider information is required for this. The procedure is as follows:
- Open an account with a broker. The determining factor is the availability of an appropriate license. Also, any major bank can act as a broker.
- Top up account. Most often this is done by bank transfer or in cash at the broker's office. You can use the Internet - it will turn out faster, but more expensive.
- Buy OFZ as an individual and wait for repayment, getting a coupon income every six months.
How reliable is such an investment?
Since all banks in Russia are “under the hood” of the state and each bank can simply revoke a license at any time, it is more reliable to entrust your money to the government immediately. In addition, the state provides a deposit insurance system.
Of course, you can invest in a foreign bank: German or American. However, the interest on such a contribution will be significantly lower than the inflation rate in our country. Thus, living in Russia and spending money here, the investor will be guaranteed to lose money.
What income can I expect?
At the end of 2017, OFZs with maturity in 2027 offered a coupon rate of 7.13% every 6 months. Rates at bank deposits were at about the same level. Only in the latter case was it a question of interest per annum.
Thus, it was possible to earn almost 2 times more than in a large Russian bank. Is it a lot or a little with real inflation of 9-12%? Let's just say it's better than nothing. At least you would save your money from inflation.
If you take OFZ with a maturity of 2-3 years, then the yield there was at the level of 9-11% per annum. This is approximately at the level of real inflation.
The maximum that you can count on today is 10% per annum. The refinancing rate has fallen, and with it the bond rates.
How to get guaranteed up to 52 000 rubles a year?
Everyone who is officially employed, pays 13% of their own salary every month. In fact, you don’t even see this money - their employer deducts from the employees' salaries and pays the tax themselves. The Russian government gives us a chance to return part of this money - up to 52,000 rubles.
The fact is that since 2015 there is a special tax deduction. The state will return you 13% of the invested amount if it does not exceed 400,000 rubles.
All that is needed is to open an IIS - an individual investment account. Abroad, this practice has been used for a long time. In our country, most investors do not even know about such an opportunity.
In fact, you have 2 options: add 13% to your investment income or not pay personal income tax. The second option is more profitable to use if you get a fairly high income on your investments - it should exceed your official salary, which is almost impossible for a beginner. Only in this case it is more profitable not to pay personal income tax on investments.
However, the salary often exceeds the investment income that a beginner can get from 400 000 rubles. Therefore, in practice, in 90% of cases the first option is used. However, it would be much more profitable to use both possibilities - not to pay personal income tax on investment income and receive a tax deduction. Is it possible?
How to get a tax deduction on IMS and not pay income tax?
Everything is simple. Open the IIS with a broker, replenish it with 400,000 rubles and buy shares of “blue labels” using the average cost effect.And choose growth stocks - those that do not pay dividends. Over 10 years, the course will almost certainly grow. The “trick” is that while you have not sold the shares more expensive, you are not required to pay income tax.
In the meantime, you are entitled to a tax deduction of 52,000 rubles from personal income tax - you pay it every month from your salary. For 10 years you will receive 520,000 rubles - a good profit, and guaranteed by the state. And if you invest 400,000 rubles a year in IIS, then your tax deduction will increase. Over 10 years, its amount will not amount to 520 thousand, but 2.86 million rubles - you can dispose of them at your discretion.
At the same time, investments in stocks will amount to 4 million rubles - this is an asset that you can never sell.
With bonds, this trick will not work. You will have to pay 13% of personal income tax on received coupon income - 7280 rubles per year at a coupon rate of 14% per annum. Nevertheless, you still have 52 000 - 7280 = 44 720 rubles per year. But the yield on bonds will also be guaranteed.
This is more reliable, because stock returns are not guaranteed. However, at such an investment horizon, you can count on at least 20% per annum using the average cost purchase strategy.
Why invest in the long term?
However, not all so simple. It is not without reason that recommendations are given to invest money for a long period of time - at least 10 years. There are several reasons for this:
- the tax deduction will have to be returned if you withdrew money from the IIA earlier than after 3 years;
- only on such a long horizon can stock growth be predicted;
- the average cost effect only works for a long period;
- if you decide to invest money in bonds, then interest with a longer maturity will be higher, and throughout the whole time you will receive passive income in the form of interest - every 6 months.
Where to buy OFZ to an individual?
Large banks are often chosen as brokers with IIS support: Sberbank, VTB 24 and others. They all offer almost the same thing, but commissions are sometimes very different. How can an individual buy OFZs at VTB 24 or Sberbank?
Sberbank: how to open IIS and acquire OFZ?
How at Sberbank to an individual to buy OFZ with maximum benefit?
Step-by-step instructions for opening IIS:
- on the bank's website, apply for the opening of IMS;
- wait for a specialist call;
- come to the nearest bank branch (not every branch offers the services of opening a brokerage account - specify this question in advance);
- Sign the documents prepared by the specialist: statement and investor questionnaire;
- replenish the account (you can deposit up to 1 million rubles per year, but the deduction is considered only from 400 thousand rubles).
Sberbank tariffs (“Independent” tariff plan - does not include access to analytics, but it is not particularly needed here):
- operations on the stock market of the Moscow Exchange - 0.165% (transaction volume - up to 50,000 rubles);
- operations with federal loan bonds - 0.5-1.5% (depending on the volume of the transaction).
Sberbank offers to buy OFZ-n No. 53003, maturity - 3 years, average annual yield - 7.24% per annum.
To buy OFZ to an individual at VTB, you will have to go through the same procedure. The process of opening the IMS is identical to the previous one. Tariff rates are the same.
Finally, another tip: carefully monitor the promotions of large banks. Sometimes they offer to buy OFZ for individuals without a commission. Let the commissions be small, but the additional yield of 0.5-1.5% will not be superfluous. After all, the task of an individual is to buy bonds and earn money.
