Here is how to buy the traditional instrument of financing military operations in Ukraine
The Ukrainian government has employed numerous creative methods to save its economy from collapse amidst the war. Namely, innovative means of additional financing (such as crypto and NFT) are combined with the usage of good old war bonds.
The Ukrainian Ministry of Finance has recently issued war bonds that pay interest of 10-11%. Each one-year bond has a nominal value of 1,000 Ukrainian hryvnias (£24.80; $33.27). The bonds range from short-term to long-term ones (from several months to several years).
Their actual price may be a little lower depending on the type of bond. At the same time, some banks may charge additional commission fees for handling securities. War bonds are sold both in UAH and USD/EUR. The proceeds from the sales of these bonds go to the needs of the Ukrainian Armed Forces.
Many people around the world have flooded social media, eager to buy some of the national debt securities from the Ukrainian government. Although at first they were available to institutional investors, now every individual can buy war bonds to support the Ukrainian army.
Ukrainian citizens can perform purchases online via the official banking websites. However, some banks may have limitations regarding the minimal purchase sum. For instance, Oschadbank has set a minimum limit of 50,000 UAH for the war bonds, while PrivatBank and KredoBank allow investing sums above 100,000 UAH. Some other banks like Tascombank or Raiffeisen have even higher buying limits.
At the same time, Ukrgasbank, Alfa-bank, Ukreksimbank, PUMB, Pivdennyi and some other financial institutions and brokers allow you to buy as little as one war bond.
The government bonds are sold via regular auction sales through the National Bank of Ukraine (NBU). You can find the schedule of the planned auctions at the website of the Ministry of Finance. Yields at auctions are usually higher than yields on the secondary market.
Buying a war bond requires opening a fiat current account and a special bank account for securities. As for the documents, individuals should provide a personal ID and taxpayer ID. Institutions will need additional documents. Special requirements also may apply to non-resident buyers.
The procedure is quite simple:
- Open a securities account.
- Sign a brokerage agreement.
- The bank purchases bonds on your behalf and places them into your account.
- You can later sell your war bonds on the secondary market or use them as a collateral for a loan.
- You pay no income tax on the interest you get.
As many banks allow only large sums to be spent on war bonds, such transactions may require the assistance of a personal manager. Some institutions also accept purchase requests only offline at a branch. Customers should contact their bank for details. Useful links with fees and conditions from the leading Ukrainian financial institutions can be found here:
- PUMB for individuals and for corporate clients
- Ukreximbank – here non-resident buyers can purchase war bonds with delivery of the securities to their Clearstream account
- ICU – licensed brokerage
- Dragon Capital and Univer Capital through Wotan app