The Treasury will offer two new five-year government bonds from 19 to 23 October, the BTP Valore traditional and the BTP Valore Insieme.
Both BTPs are designed for families and small savers, but there are some differences between them. Let’s find out.
Common characteristics and rules
First of all the similarities: the identical duration (5 years) and the issue date (from 19 to 23 October 2026) have already been mentioned.
For the rest, as usual, the minimum denomination is equal to 1,000 euros, at par and without commissions, and taxation involves the classic preferential rate of 12.5%, well below the earnings deriving from the stock market which are taxed at 26%.
Then there is the exemption from inheritance tax and from the calculation of the ISEE up to 50,000 euros. And both securities can be resold at any time on the secondary market at market prices, a particularly simple option to do via your home banking.
It is perhaps all too obvious to specify that the two government bonds are independent of each other and therefore cumulative: consequently, if desired, it is possible to purchase both.
Up to this point we have discovered what the Btp Valore and the Btp Valore Insieme have in common. Now it’s time to move on to the differences.
Btp Value
The classic Btp Valore provides quarterly coupons with increasing returns. Coupons increase according to this trend:
- first and second year – basic return;
- third and fourth year – the first increase in the coupon is triggered;
- fifth year – the second coupon increase is triggered.
All things considered, the BTP Valore is suitable for those looking for a periodic income or a sort of short-term supplementary income, through a quarterly cash flow.
Btp Value Together
The Valore Insieme BTP, unlike its cousin, does not pay periodic coupons but recognizes the accumulated return in a single solution at the end of five years.
To compensate for the lack of periodic collection and the time value of money, which is decreasing slightly due to inflation, the final return of the Valore Insieme BTP is higher than the simple nominal sum of the coupons detached from the traditional Valore BTP.
All things considered, the BTP Valore Insieme is suitable for those who aim to forget about the investment for all five years, aiming to capitalize on the entire investment at the end.
How to participate in government bond auctions
Small savers cannot participate directly in government bond auctions: requests must be submitted through authorized banks or intermediaries, including through home banking services.
But be careful: not all banks are authorized for online purchases during the placement phase, even if the customer already has his securities deposit and is used to buying and selling financial products via the app or website of his bank.
If you are unable to purchase the security during the placement, you can contact your bank to ask for information. Alternatively, you can wait for the listing on the secondary market and buy later. In this case, however, the price could be higher than 100, i.e. the nominal value, and reduce the actual return compared to that obtainable by subscribing to the security being issued. On the contrary, if market rates were to rise significantly in the following months, the price of the BTP would react by falling, making a purchase possible under more favorable conditions. However, it is not certain that the price will fall below 100, nor that a lower price automatically guarantees a better return.
