What Bank Bonds Should I Buy to Get the Best Returns?

It has been observed that many banks have been issuing public bonds to raise capital, offering higher interest rates than regular savings accounts.

Bank of Vietnam (BVBank) has just offered public bonds (first phase) through direct issuance at BVBank transaction points, with competitive interest rates.

A total of 56 million bonds are being offered, with an expected issuance of six phases. The first phase includes 15 million bonds. Investors can purchase these bonds at a face value of VND 100,000 per bond. The minimum subscription is 100 bonds for individual investors and 1,000 bonds for institutional investors. Thus, individual customers only need VND 10 million to buy and hold BVBank bonds to enjoy high returns.

The first batch of bonds will be offered from now until 12:00 noon on September 10. These bonds have a six-year term. Notably, the interest rate for the first year is fixed at 7.9% per annum. Customers will receive interest annually.

From the second year onwards, the bond interest rate will be the reference rate (based on the average 12-month personal savings rate of Vietcombank, Vietinbank, BIDV, and Agribank at the end of the period before the annual interest rate adjustment) + 2.5% per annum. Currently, the average interest rate of the four state-owned commercial banks is around 4.7% per annum. This calculates to an interest rate of approximately 7.2% per annum or higher from the second year onwards.

These interest rates are considered attractive in the current market, compared to regular savings accounts and other banks issuing public bonds. For example, Agribank offered public bonds worth VND 10 trillion in 2024 with a total interest rate of nearly 7% per annum. HDBank issued public bonds with a seven-year term, with an interest rate calculated as the reference rate plus a margin of 2.8% per annum, totaling approximately 7.5% per annum.

Mr. Ngo Minh Sang, Director of BVBank’s Retail Banking Division, shared that BVBank bonds are a safe and efficient investment channel. These bonds, issued by BVBank itself, will be registered centrally at the Vietnam Securities Depository and listed on the trading system of the Hanoi Stock Exchange after the conclusion of the offering period.

“The bonds will be officially traded after the approval of the above procedures by the regulatory authorities. BVBank hopes to provide customers with an additional opportunity for efficient and transparent profitable investment,” said Mr. Sang.

According to economic experts, bank bonds are a safe and efficient investment channel compared to regular savings accounts at the moment. Currently, the interest rate for savings accounts with a term of over 12 months at state-owned commercial banks is around 4.7% per annum, while it is around 5-5.5% per annum at joint-stock commercial banks.

Bank bonds and savings accounts are similar in nature, as both involve lending money to the bank, which has the obligation to pay interest on that amount. Receiving the principal amount upon maturity is also similar to withdrawing money from a savings account after the term ends.

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At BVBank, the bank has repurchased all previously issued bonds on time. For this bond issuance, BVBank will exercise the buyback option from the 24-month anniversary of the issue date.

“Investing in bank bonds requires idle capital over a long-term period, similar to regular savings accounts. Buying bank bonds is safe and carries less risk compared to other investment channels. If customers need capital, they can also pledge or mortgage the bonds to borrow money from the issuing bank, ensuring high liquidity,” shared the economic expert.

To register to purchase bonds at BVBank, customers can follow these steps:

Step 1: Customers sign the Bond Subscription Form at BVBank transaction points.

Step 2: Customers make payment for the bond purchase. Customers will receive an SMS notification confirming the successful transaction.

Step 3: Customers wait to receive an SMS notification to collect the Bond Ownership Certificate at the chosen transaction point within 30 days from the issue date.