[WATCH] New government bonds for those 62 and over

People born in 1956 can apply for government bonds with a minimum investment of €500 and a maximum of €8,000

Finance Minister Edward Scicluna
Finance Minister Edward Scicluna

The government has announced that it will be issuing a new tranche of savings bonds for those born in or before 1956, who will be able to apply for a minimum of €500 and a maximum of €8,000 in bonds.

Following the success of previous issuances, the government would be again helping people who have reached a certain age by offering them an interest rate better than that offered by the banks, Finance Minister Edward Scicluna said.

"The €8,000 limit is being set in the interest of avoiding over-subscription," Scicluna said, "The government has asked Parliament to lend €100 million for the purpose of this issuance. A total of €65 million will be offered first, but if this amount is reached, it will be increased to €100 million."

Those interested have to apply by 11 June, and this time round there will be two application forms - 'Form A' for those who have never applied for such bonds before, and 'Form B' for applicants who already applied last year.

In the case of an over-subscription, an allotment policy will come into effect whereby preference will be given to those who are applying for this first time. If the over-subscription greatly exceeds the €100 million made available, some people might get less than they applied for, however the policy on this will be announced in due course, if it is necessary, Scicluna said.

The bonds will offer an interest rate of 3% over five years. The five year period will have to be adhered to, unless there are exceptional circumstances - such as in cases of illness - where a person can keep the bonds for less time than this, and suffer a 90-day loss of interest.

Applications forms will be available at banks and brokers' offices, the minister said, highlighting that these can be filled in before 11 June. Those who had already applied for such bonds will also be sent through the post an offer to apply for this year's issuance, with 'Form B' included.

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