If a person sets a goal - to save his accumulated savings, then, as a rule, he chooses the simplest option - a bank deposit. It is convenient, fast, reliable. However, there are those who do not just need to save their accumulated savings. Their goal is to increase. To do this, you need to choose completely different tools. For example, bonds in foreign currency.
Alternative to deposit
Securities, unlike bank deposits, offer a higher percentage. This attracts potential investors who want to profitably invest available funds and make a profit.
Despite the fact that bonds in foreign currency are already available to individuals, they are still not in great demand. This tool still causes a lot of questions and disputes among the inhabitants.
Against the background of lower interest rates on bank offers, a yield of ten percent on bonds in foreign currency seems unrealistic. However, such favorable offers periodically appear on the stock market. The number of people wishing to purchase them is so great that such bonds are being bought up with incredible speed. Foreign currency bonds for individuals is an attractive way to invest their own funds. Indeed, as a result, the owner of debt securities receives not only the nominal value and the promised income. Currency is constantly growing in price. This further increases the profit of a potential investor. Especially in the long run.
That is why those who study financial topics have long preferred foreign currency bonds to bank deposits.
Features
To assess the attractiveness of this financial instrument for yourself, you need to know not only the profitability expressed in the interest rate.
First of all, one should not mistakenly believe that bonds in foreign currency are available only to legal entities. For a long time, the stock market has ceased to be the privilege of exclusively large players. You can start acquiring securities even with a small amount available. Gradually, savings will increase.
When purchasing bonds, it is not necessary to own them for the entire term to maturity. If the securities are liquid, it will not be difficult to sell them in the stock market. However, you need to carefully evaluate the situation in order to prevent losses. Selling bonds denominated in foreign currency is only worthwhile when demand and price increase, respectively. This method will allow the investor to maintain and increase their own savings.
Bonds in foreign currency of Belagroprombank
It will be about a Belarusian bank issuing securities. Currently, this financial instrument is considered profitable and relatively reliable at the same time.
Having a certain amount of available funds, a potential investor can purchase registered bonds issued by Belagroprombank. The owners of this type of debt securities can become legal entities, as well as individual entrepreneurs. That is, for ordinary customers, a similar method of investing in Belagroprombank is still unavailable.
Eurobonds
This word refers to bonds in foreign currency. You can also hear the term "Eurobonds", which means the same thing. The main feature is that such bonds are issued for sale in any country in the world. In fact, they can be pegged to any currency.However, if we talk about which government bonds in foreign currency are popular in the Russian market, then these will be securities in dollar terms.
Eurobonds are placed on the stock exchange through a syndicate of underwriters, which brings together brokers from different countries, banking organizations and large investment companies.
I must say that such securities have stringent requirements and relevant placement rules. It is possible that the same bonds will be sold in several countries at once.
Bonds of the Ministry of Finance in foreign currency
Governments of various states also issue debt securities. For example, the Russian Ministry of Finance may place its own currency bonds denominated in dollar terms on the market. Potential investors can find similar offers in free float.
It is believed that government bonds denominated in foreign currency are more reliable than ruble bonds. This is due to the fact that the Ministry of Finance has international obligations. And to spoil your own reputation in the world market is very risky. This significantly undermines the credibility and credibility of the organization that issued and sold foreign currency bonds, but failed to fulfill its obligations for any reason.
Requirements
So, it has already been said above that even individuals can purchase bonds in foreign currency. However, for this they will need an intermediary represented by a professional broker. You should open an account in advance and deposit the amount in the currency in which the purchase is planned.
Availability
I must say that after its appearance, Eurobonds were not present on the stock market. Previously, it was exclusively an interbank financial instrument. It was acquired by insurance companies, large investors, pension funds, as well as other serious players.
In 2014, Eurobonds became available to Russian investors, appearing on the Moscow Exchange. However, the initial rates were too high. The minimum purchase amount was one hundred thousand dollars. For most potential investors, this bar was unattainable.
However, in 2015, appropriate measures were taken. Russian companies that issued bonds in foreign currency agreed to reduce the rate to one thousand dollars. This amount was significantly lower than the original and attracted many new potential investors, for whom the previous bar of one hundred thousand dollars was unattainable.
However, behind this scheme is the interbank market, which combines the funds of many investors and redeems the very lots for one hundred thousand dollars. At the same time, access to the purchase of Eurobonds as one of the most reliable financial instruments was opened for private investors.
However, the situation has not fundamentally changed. The main buyers of Eurobonds are all the same large investment companies and pension funds. Unlike small private investors, they have the opportunity to purchase lots worth two hundred thousand dollars and receive increased returns.
Types of Currency Bonds
Why do we need debt securities in foreign currency? Their main task is that companies issuing bonds, including the state, have the opportunity to attract borrowed funds and further use them to achieve their own goals, requiring cash injections.
The advantages of foreign currency bonds also lie in the fact that funds do not come in rubles and in the future there is no need to lose some part of the conversion. However, companies issuing debt securities are making serious commitments. After all, now they must return to investors not only the amount of the loan, but also the promised interest.
So, the types of bonds are determined by the company that issued them.The following options for debt securities, which were discussed above.
- State.
- Municipal.
- Corporate
Let's talk about them in more detail.
State
In the stock market, such bonds are quite easy to distinguish from the rest. They begin with the word "Russia." However, the minimum cost is a thousand in dollar terms. In case of acquisition of such a bond, the state becomes the guarantor of performance of obligations. Therefore, customers consider this type of securities a reliable way of investing. However, you have to pay for this with a rather low yield. She is seven to eleven percent.
Municipal
Another type of debt securities for potential investors.
In this case, municipal property becomes the guarantor for bondholders. For this reason, the current instrument is somewhat inferior to government securities, but is considered relatively reliable. Has a similar minimum bid. But it offers a larger percentage. The yield of municipal bonds may be one to two percent higher than that for government bonds.
Corporate
The difference from the previous types of bonds is that they are issued by large companies. In terms of reliability, they are inferior to state and municipal, but at the same time attract potential investors with higher returns.
However, before acquiring corporate bonds, you need to carefully understand who issues them, check the company's reputation and make sure that it fulfills its obligations.
Having appreciated all the advantages, all the strengths and weaknesses, the potential investor will be able to make his own decision by answering the question of which bonds are best to buy. What is more important for him: reliability or declared profitability?