As announced by the Minister for Finance in the last Budget and following the strong paraticipation in last year’s 62+ Savings Bond issue, the government is launching another 62+ Malta Government Savings Bond for all individuals born in 1956 or before.
This issuance is being re-launched in the light of the persistent low fixed deposit interest rates offered by commercial banks which continued to negatively affect pensioners experiencing a substantial decrease in their additional income derived from past savings. It was mainly for this reason that in this year’s Budget, the govenment decided to re-issue the 62+ Savings Bond, offering an attractive rate higher than that offered by the market, targeting individuals born in 1956 or before, who are mainly made up of people on a retirement pension, to improve their income.
Similar to last year’s issuance, this savings bond is going to be re-offered at an interest rate of three per cent per annum fixed for five years, which is much higher than the interest rate currently being offered. Every eligible individual may invest a minimum sum of €500 up to a maximum of €8,000. The investment shall be fixed for five years and shall not be negotiable on the Malta Stock Exchange and cannot be transferred to any other individual.
The bond is intended to be held to maturity, that is until 2023. Yet an individual can encash the full amount invested before its maturity date, subject to a penalty equivalent to three months’ interest, if the need arises. Preference will be given to new eligible applicants made up of (i) individuals born in 1956 and (ii) individuals born before 1956 who were eligible to apply in last year’s issuance but did not participate for any reason whatsoever. After the bonds are allotted to these new applicants, the remaining amount available for allocation (if any) will be allocated among last year’s applicants who re-applied again in this issuance and whose name appear on the register of the 62+ Savings Bonds on May 7, 2018, in accordance with the discretion of the Accountant General.
The interest on this bond shall be paid semi-annually in arrears on June 19 and December 19 during the tenor of the bond (unless it is encashed before). The resident eligible individual investing in the 62+ Malta Government Savings Bond – Issue 2018 can opt to receive the interest net of tax (FWT) or gross and declare the gross investment income in the income tax return.
Applications for the 62+ Malta Government Bond – Issue 2018 open at 8.30am tomorrow and close at 5pm on Tuesday, or earlier. Those interested to subscribe in this Bond must complete the application and lodge it at the authorised financial institutions or authorised investment service providers.