Nov 15, Kathmandu - The Public Debt Management Office has opened the sale of two savings bonds to raise government debt. The office is going to issue ‘Citizen Savings Bond-2087’ worth Rs 2.5 billion and ‘Foreign Employment Savings Bond-2087’ worth Rs 500 million.

Applications can be submitted for the purchase of both these savings bonds with a five-year tenor until Mangsir 25, and the issuance will be on Mangsir 28. The annual interest rate will be 6.5 percent for the Citizen Savings Bond and 7.5 percent for the Foreign Employment Savings Bond.

The interest on the savings bond will be paid to the bank account of the concerned purchaser every six months, and the minimum amount to be paid is Rs. 10,000 and the maximum amount to be purchased is Rs. 10,000 divided by the remainder.

Nepali citizens and non-resident Nepali citizens can purchase Citizen savings bonds. Similarly, foreign employment savings bonds can be purchased by Nepali citizens and non-resident Nepalese who are engaged in employment outside the country or have returned from employment outside the country for six months, in the name of themselves or their family members. Applications can be made for the purchase of savings bonds through the DOMS system and the Investor Portal operated by the Public Debt Management Office.

While citizen savings bonds were sold 100 percent in previous years, there has been little interest from investors in foreign employment savings bonds. Prakash Pudasaini, Deputy Secretary of the Public Debt Management Office, said that due to lack of sufficient information among investors about savings bonds, purchases are only less than the amount issued in previous years.

"What is a savings bond? Why invest? How to invest? Many people are not aware of such issues. Although the number of buyers has increased in recent years, many are still not aware of it," he said.

Pudasaini informed that applications worth Rs 800 million have been received for citizens' savings bonds in the last four days alone. He said that it is estimated that they will be purchased before the specified time this year. According to him, these savings bonds will be issued as 'stocks', which will be available for purchase first by the first applicant.

Stating that the interest rates of such savings bonds are more attractive than bank term deposits, Pudasaini said that most citizens are not aware of its importance and benefits. "Many people prefer sectors such as real estate, gold and silver, capital market and term deposits for investment. Savings bonds are a government instrument that is considered easier, safer and more attractive than these investment options," he said.

According to Deputy Secretary Pudasaini, savings bonds are a completely safe investment. The government has ensured the principal in this. In addition, the interest amount of savings bonds is deposited directly into the buyer's bank account every six months. Pudasaini mentioned that loans can be taken from banks and financial institutions by keeping it as collateral.