Mirae Asset Securities Opens November Subscription for Retail Government Bonds

Additional Rates on 10- and 20-Year Bonds Rise

Mirae Asset Securities said on November 11 that it will accept subscriptions for November’s Personal Investment Government Bonds.

Subscriptions will be accepted for five business days, from November 11 through November 17. Customers with a dedicated account for Personal Investment Government Bonds can apply through Mirae Asset Securities branches nationwide or its mobile trading system (MTS), MAPS, from 9 a.m. to 4 p.m. on business days. Customers with DC or IRP retirement pension accounts can subscribe to the 10-year and 20-year bonds through the retirement pension products section of the MTS.

The total issuance of Personal Investment Government Bonds in November will amount to KRW 200 billion. By bond type, the offering comprises KRW 2 billion in 3-year coupon bonds, KRW 3 billion in 3-year compound-interest bonds, KRW 20 billion in 5-year bonds, KRW 140 billion in 10-year bonds, and KRW 35 billion in 20-year bonds. Compared with the previous month, issuance of 5-year, 10-year, and 20-year bonds has each decreased by KRW 10 billion, while issuance of 3-year bonds remains unchanged.

The total issuance of 10-year and 20-year bonds is KRW 175 billion, accounting for 87.5% of the total. The company said the offering is weighted toward long-term bonds that can also be subscribed to through retirement pension accounts (DC and IRP), providing options for long-term asset management and pension asset management.

The November coupon rates are 3.940% for 3-year bonds, 3.935% for 5-year bonds, 4.155% for 10-year bonds, and 4.155% for 20-year bonds. The additional rates are 0% for 3-year bonds, 0.10% for 5-year bonds, 0.63% for 10-year bonds, and 0.79% for 20-year bonds. Compared with the previous month, they have risen by 0.050 percentage points for 5-year bonds, 0.350 percentage points for 10-year bonds, and 0.360 percentage points for 20-year bonds.

Accordingly, if held to maturity, the pretax returns will be approximately 11.82% for 3-year coupon bonds (an annual average of 3.94%), approximately 12.29% for 3-year compound-interest bonds (an annual average of 4.09%), approximately 21.87% for 5-year bonds (an annual average of 4.37%), approximately 59.58% for 10-year bonds (an annual average of 5.95%), and approximately 162.56% for 20-year bonds (an annual average of 8.12%).

Personal Investment Government Bonds are savings bonds issued by the government for individual investors. Investors can purchase 3-, 5-, 10-, and 20-year bonds through a dedicated account. If they hold bonds with terms of five years or longer to maturity, the combined coupon and additional rates are applied on an annual compound basis. They can also receive separate taxation benefits on purchases of up to KRW 200 million in total. However, 3-year bonds are not eligible for separate taxation.

Investors can purchase 10-year and 20-year bonds through retirement pension accounts (DC and IRP). Taxes on Personal Investment Government Bonds held in these accounts are deferred during the investment period; if the proceeds are later received as a pension, pension income tax applies subject to the relevant requirements. By making use of the different tax features of dedicated accounts and retirement pension accounts, investors can develop long-term asset management strategies suited to their investment horizons and the nature of their funds.

If total subscriptions for each bond type do not exceed its issuance limit, the full amount will be allocated. If subscriptions exceed the limit, an equal allocation of up to a base amount of KRW 3 million will be made first, and the remaining bonds will be allocated in proportion to subscription amounts.

A Mirae Asset Securities official said, "In long-term asset management, it is important to consider both stability and returns in line with investment objectives and time horizons. Personal Investment Government Bonds are backed by the stability of government-issued bonds and offer the potential for long-term compound returns when held to maturity. They are an investment option that can be used according to the features of dedicated accounts and retirement pension accounts."

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