Subscription for Popular Government Bonds for Individual Investors Worth 230 Billion Won Opens from October 8

The Ministry of Economy and Finance will issue a total of 23 billion won worth of government bonds for individual investors in October. Considering that the entire issuance was sold out last month due to the effect of the "retirement pension-type government bond for individual investors" introduced in the previous month, the ministry decided to maintain the same issuance volume as the previous month.

On September 30, the Ministry of Economy and Finance announced the plan for the October issuance of government bonds for individual investors. The details are as follows: 2 billion won and 3 billion won respectively in 3-year coupon bonds and compound interest bonds, 50 billion won in 5-year bonds, 150 billion won in 10-year bonds, and 45 billion won in 20-year bonds.

The coupon rates for government bonds for individual investors will be based on the auction rates of the same maturity treasury bonds issued in September (3-year: 3.875%, 5-year: 4.275%, 10-year: 4.510%, 20-year: 4.520%).

An additional yield spread will be applied as follows: 0.05% for the 5-year bond, 0.28% for the 10-year bond, and 0.43% for the 20-year bond. The 3-year bond will not receive an additional yield spread, taking into account the returns of financial market products.

For the government bonds for individual investors to be issued in October, the pre-tax return for holding to maturity will be approximately 11.6% for the 3-year coupon bond (annual average return of 3.9%), approximately 12.1% for the 3-year compound interest bond (annual average return of 4.0%), approximately 23.6% for the 5-year bond (annual average return of 4.7%), approximately 59.7% for the 10-year bond (annual average return of 6.0%), and approximately 162.8% for the 20-year bond (annual average return of 8.1%).

The subscription period is from October 8 to 15. If the total subscription amount is within the monthly issuance limit for each category, the full amount will be allocated. If the total subscription amount exceeds the monthly cap for any category, an equal allocation will be made up to the base amount (3 million won), and the remaining bonds will be allocated in proportion to the subscription amount. The allocation results will be announced within two business days after the subscription period ends.

Individual investors who purchased government bonds for individual investors issued between June 2024 and September 2025 may make early redemption during October. However, only the principal and interest calculated at the coupon rate applied at the time of purchase will be returned; compound interest including the yield spread and the benefit of separate taxation on interest income will not be provided in this case.

Government bonds for individual investors are products that allow you to receive annual compound interest on both the coupon rate and yield spread, if held to maturity. Interest income on purchases up to 200 million won is taxed separately at 14%, so there is no need to worry about comprehensive taxation on financial income. However, to encourage holding to maturity, both principal and interest are paid out in a lump sum at maturity. Trading in the market is not possible, and early redemption is allowed only after holding the bonds for one year.

As of last month, in addition to the exclusive government bond accounts for individual investors (Mirae Asset Securities), 10-year and 20-year government bonds for individual investors can now also be purchased through retirement pension accounts (DC-type and IRP-type). To make such an investment, you must have a retirement pension account (either DC-type or IRP-type) with one of the following institutions: Shinhan Bank, Hana Bank, NH Nonghyup Bank, Mirae Asset Securities, Samsung Securities, Korea Investment & Securities, KB Securities, or NH Investment & Securities.

This content was produced with the assistance of AI translation services.