Treasury Bond Calculator

How much can you earn on treasury bonds?

Retail Treasury bonds are a safe form of saving. The calculator calculates the forecast net profit (after 19% Belka tax) for all types of bonds. In the first period, the interest rate is fixed (from the issue letter), and in indexed bonds (COI, EDO) in subsequent years it isinflation + margin.

Types of retail bonds

• OTS- 3-month, fixed,
• ROR/DOR- annual and 2-year, interest rate dependent on the NBP rate,
• TOS- 3-year, fixed, with capitalization,
• COI- 4-year, indexed to inflation, interest paid annually,
• EDO- 10-year, indexed inflation, with capitalization of interest.

Types of retail bonds - which one to choose

Inflation-indexed bonds (COI, EDO) infirst yearhave a fixed interest rate from the issue letter, and only from the second year - inflation + margin. The calculator takes into account this difference andBelka's tax of 19%.

Early redemption and practical rules

You can buy the bonds forPLN 100 per unitat PKO BP, Pekao or obligacjeskarbowe.pl - no commission. You can exit the investment ahead of time (early redemption): you then return a fee of PLN 0.50-3 per bond (depending on the type, e.g. EDO PLN 3), deducted from the accrued interest - you never lose your capital. At maturity, you can roll over the funds to a new issue, often at a discount. Compare the result with thedeposit profit calculator- at higher inflation, EDO usually beats deposits thanks to indexation.

How does inflation indexation work in COI and EDO bonds

Indexed bonds (4-year COI and 10-year EDO) are the most popular way to protect savings against loss of value. The mechanism is simple, but it is worth understanding it before purchasing:

• First year- the interest rate isfixedand known in advance from the issue letter (e.g. 6.00% for a given series). Inflation does not matter during this period.
• From the second year- interest is calculated asinflation + fixed margin. The calculation takes into account the inflation rate of the Central Statistical Office announced in the month preceding the beginning of a given interest period.
• Margin(e.g. +1.50% for COI, +2.00% for EDO) is recorded in the issue letter and remains unchanged throughout the entire period - it gives real profit above inflation.

The difference between COI and EDO is the method of payment: COIpays interest every year(good when you need an inflow of cash), and EDOcapitalizes it- interest is added to the capital and in the next year it "works" itself (compound interest, better for the long term and saving for retirement). The calculator takes into account both mechanisms and different margins, so the profit forecast is realistic, not only from the first year.

IKE/IKZE bonds - how to legally avoid Belka's tax

Interest is charged19% of Belka's taxis collected on interest, which noticeably reduces the profit - with a long period and capitalization (EDO) it is a real loss. However, it can be deferred or completely avoided by purchasing bonds under theIKE-ObligacjeorIKZE-Obligacjeaccount operated by the PKO BP brokerage house:

• IKE- with withdrawals after the age of 60 (and meeting condition of the period of payments) the profit isfully exempt from tax Belka.
• IKZE- you deduct the payments from the PIT tax base already in the current year; when paid after the age of 65 you only pay a flat-rate 10% instead of Belka's 19%.

There are annual deposit limits (separate for IKE and IKZE, indexed every year). For a long-term saver, this is often the most advantageous way to hold inflation-linked bonds. In your case, whether bonds are better than deposits can be checked by comparing the result withdeposit calculator.

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