Government Bonds


Government bonds are bonds issued by a national government, bound to pay announced fixed periodic profit payments and to repay the face value on the maturity date. Many government bonds provide facility of combined interest so non collection of periodic profit enhance profit collected at the time of maturity. Government bonds are usually denominated in the country’s own currency. Bonds issued by national governments in foreign currencies are normally referred to as sovereign bonds, although the term “sovereign bond” may also refer to bonds issued in a country’s own currency if these bonds are specifically intended for international market.
International credit rating agencies will provide ratings for these government bonds issued by various countries depending upon country’s economic stability and international reputation.
Although government bonds, called saving certificates in Pakistan, do not provide high return on investment but these bonds are considered safest and securest form of investment, being guaranteed by government (Although government corruption cannot ignored but on my few inquiries government employees firmly assured me that not a single person lost their money in this investment). Due to such assurances, I invested all my money in government national saving certificates and prize bonds. So, I consider myself among the most patriotic national partners.
Government bonds return is almost negligible when compared with property investment returns. During my analysis, I observed that real estate provided incredible 200 times return during last 25 years in Pakistan. My aunty took one flat in only Rs. 5,000 rupees in one LDA scheme in Lahore and now its’ price is Rs. 10, 00,000. It is incredible 200 times increase. Property investment turned people billionaires in Pakistan. Same is the case in other good schemes like DHA, WAPDA Town etc.
Why such an unbelievable increase took place given Pakistan is a country with little earning potential, low social security, high crimes and corruption rate and added continuous terrorism and fundamentalism. It is due to alarming growth of population so phenomenal increase in demand and prices.

Major Countries Profit Rate (Early 2014)
in Local Currency
Bonds Issued By:
Australia 4.1
Brazil 12.93
Canada 2.44 Canada Bond
Fixed rate Real return bond (RRB)
Inflation-indexed Canada Savings Bond (CSB)
China 4.6 Ministry of Finance China
Euro Area 1.12
France 2.3 Agency France Trésor, the French Debt Agency
Germany 1.7 Finanzagentur GmbH, the German Debt Agency
India 8.79
Italy 3.65 Dipartimento del Tesoro
Japan 0.59 Japanese Government Bonds (JGBs)
Ministry of Finance Japan
Russia 8.4
United Kingdom 2.8 UK Debt Management Office
United States 2.76 Bureau of the Public Debt
Profit Rate in Local Currency
Brazil 12.93
Canada 2.44 Canada Bond – fixed
rate Real return bond (RRB) – inflation-indexed Canada Savings Bond (CSB)
Chile 4.98
Colombia 7.25
Mexico 6.35
Peru 6.52
Unite States 2.76 Bureau of the Public Debt
Rate in Local Currency
Austria 1.99 Österreichische Bundesfinanzierungsagentur, the Austrian Federal Financing Agency
Belgium 2.46 Agentschap van de schuld/Agence de la Dette, the Belgian Debt Agency
Bulgaria 3.5
Croatia 5.23
Denmark 1.72
Euro Area 1.12
Finland .01 Valtiokonttori, the Finland State Treasury
France 2.3 Agence France Trésor, the French Debt Agency
Germany 1.7 Finanzagentur GmbH, the German Debt Agency
Greece 7.61 Οργανισμός Διαχείρισης Δημοσίου Χρέους, the Public Debt Management Agency (P.D.M.A.)
Hungary 6.3
Iceland 675 Lánasýsla ríkisins, the Icelandic National Debt Management Agency
Ireland 3.23
Italy 3.65 Dipartimento del Tesoro
Latvia 3.2
Lithuania .3
Netherlands 1.94 Agentschap van het ministerie van Financiën, the Dutch State Treasury Agency
Norway 2.82
Poland 4.53
Portugal 4.6
Romania 5.6 Ministerul Finanțelor Publice, the Public Finance Ministry
Russia 8.4
Slovenia 4.9
Spain 3.6 Teoro Público, the Spanish Public Treasury
Sweden 2.19 Riksgäldskontoret, the Swedish National Debt Office
Switzerland 1.03
Turkey 10.29
United Kingdom .8 UK Debt Management Office
Profit Rate in Local Currency
China 4.6 Minitryof  Finance China
Hong Kong 2.29 Government Bond Programme
India 8.79
Indonesia 8.36
Israel 3.58
Japan 0.59
Malaysia 4.12
Pakistan 12.8 National Savings, Pakistan
Philippines 4.35
Singapore 2.53
South Korea 3.48
Taiwan 1.6
Thailand 3.79
Vietnam 8.77
Profit Rate in Local Currency
Australia 4.1
Profit Rate in Local Currency
Kenya 11.83
Nigeria 3.8
South Africa 8.65