Government Bonds

Government bonds are consider one of the most secure if not particularly exciting investment options. When you buy a Government bond, you lend money to the Government that has issued that bond. In return for that money, the Government provides you with a bond and promises to repay the value of the bond when it matures. The Government also promises to pay a specified rate of interest on the money you have invested.

Irish Government bonds are issued by the National Treasury Management Agency (NTMA). Government bonds are issued in the currency of the country, so while Irish Government bonds are in euro, US Government bonds are in US Dollars.

What are the risks of buying them?

Government bonds are often referred to as a ‘low risk’ investment. This means there is little capital risk  as the Government promises to repay your investment, plus interest. However, there is still inflation risk, meaning that the money you get when the bond matures could have less buying power, due to higher than expected inflation. If you buy bonds from a foreign Government in a different currency, consider currency risk, as the value of the money you receive when the bond matures will fluctuate in line with the value of the foreign currency.

How can you buy Government bonds?

Irish Government bonds can be bought through stockbrokers. Details of the stockbrokers that sell Irish Government bonds are listed on the NTMA website, along with the fees or commission charged by the various stockbrokers.

Some stockbrokers have a minimum order amount, for example, €5,000, in order to buy Government bonds on your behalf.  So ask your provider for details of all costs and additional charges before you buy them.