62+ Malta Gov­ern­ment Sav­ings Bond to be is­sued on Mon­day

Malta Independent - - NEWS -

As of Mon­day, peo­ple born in 1955 or prior will be able to ap­ply to pur­chase bonds specif­i­cally tar­get­ing those who are 62 years of age and over.

The Bond will carry an at­trac­tive in­ter­est rate of 3% per an­num, a yield which is much higher than what is cur­rently be­ing paid by sim­i­lar five-year fixed term in­vest­ments.

When the 62+ Gov­ern­ment Sav­ings Bond was launched, Fi­nance Min­is­ter Ed­ward Sci­cluna noted how in the present sce­nario, in which there is a sharp de­cline in ad­di­tional in­come for the el­derly as a re­sult of the re­duc­tion in in­ter­est rates on fixed de­posit ac­counts be­ing of­fered by com­mer­cial banks, the gov­ern­ment in­tro­duced the bond as a bud­get mea­sure with a much bet­ter in­ter­est rate than oth­ers on the market, that would help en­hance pen­sion­ers’ in­come.

In or­der for this type of Bond to be is­sued at such at­trac­tive rates ad­dressed to meet­ing the needs of the el­derly, it was nec­es­sary to amend the Trea­sury of Malta Law Bills. The law was passed by Par­lia­ment last July.

El­i­gi­ble in­di­vid­u­als can in­vest a min­i­mum amount of €500 up to a max­i­mum amount of € 10,000 in the bond. The in­ter­est is payable semi-an­nual in ar­rears on 13 March and 13 Septem­ber dur­ing the tenor of the bond (un­less with­drawn be­fore) in the bank ac­count nom­i­nated by the holder. Res­i­dent In­di­vid­ual hold­ers can opt to re­ceive the in­ter­est net of tax or gross and de­clare the in­vest­ment in­come re­ceived in the in­come tax re­turn.

The 62+ Gov­ern­ment Sav­ings Bond is of a five-year term and will be re­paid at par on 13 Septem­ber 2022. The bond can­not be ne­go­ti­ated, as­signed or trans­ferred onto any other in­di­vid­ual or le­gal per­son and can­not be pledged. There is no sec­ondary trad­ing market for the Bond. This Bond is a spe­cial is­sue and there­fore there is no guar­an­tee that an­other is­sue will be avail­able when the bond is re­paid.

The bond can­not be held jointly with an­other in­di­vid­ual. More­over, cu­ra­tors ap­pointed by court; an in­di­vid­ual or a le­gal per­son, act­ing un­der a valid Power of At­tor­ney, can pur­chase bonds on be­half and in the name of an­other el­i­gi­ble in­di­vid­ual. In such cases, the bond shall be deemed to be held by the el­i­gi­ble in­di­vid­ual on whose be­half it was pur­chased.

Bond­hold­ers may with­draw the whole amount in­vested in the 62+ Gov­ern­ment Sav­ings Bond be­fore ma­tu­rity date of the bond sub­ject to the pay­ment of a penalty for early re­pay­ment equiv­a­lent to three (3) months gross in­ter­est on the sum with­drawn. By way of ex­am­ple, a bond­holder who in­vested the max­i­mum per­mis­si­ble amount of € 10,000 who opts for early re­demp­tion of the bond will in­cur a penalty of €75.

No penalty will be charged where the Bond is re­paid be­fore ma­tu­rity to the heirs of the de­ceased bond­holder. In such a case, upon the no­ti­fi­ca­tion of the death of a Bond­holder, the ac­count is put on hold and the prin­ci­pal and ac­crued in­ter­est up to the last day, which im­me­di­ately pre­cedes the re­pay­ment date of the bond, is paid to the heirs through the trans­mis­sion Causa Mor­tis pro­ce­dure. The bond held by the de­ceased is not trans­fer­able onto heirs.

The 62+ Malta Gov­ern­ment Sav­ings Bond can be pur­chased from all au­tho­rised fi­nan­cial in­sti­tu­tions and in­vest­ment ser­vices providers be­tween Mon­day 4 Septem­ber 2017 and Wed­nes­day 6 Septem­ber 2017. A list of all au­tho­rised fi­nan­cial in­ter­me­di­aries can be viewed on the Trea­sury’s web­site at www.trea­sury.gov.mt.

In the event that the orig­i­nal sum on is­sue is over­sub­scribed, the Ac­coun­tant Gen­eral re­serves the right to ex­er­cise the over­al­lot­ment op­tion by is­su­ing fur­ther bonds up to a max­i­mum men­tioned in the is­sue of the Bond. In the case that not­with­stand­ing the ex­er­cise of the over­al­lot­ment op­tion there re­mains ap­pli­ca­tions, which are un­sat­is­fied, then the Trea­sury will scale down ap­pli­ca­tions as deemed ap­pro­pri­ate.

Newspapers in English

Newspapers from Malta

© PressReader. All rights reserved.