The new BTP Italia Sì debuts from 15 to 19 June 2026, the inflation-indexed government bond that adjusts coupons and capital to the trend in consumer prices. But who is this new product intended for and what are its main features? What are the other bonds that protect against the high cost of living?
How the BTP works Yes
The new Btp Italia Sì is a government bond reserved for the retail market or individual savers and other retail investors who will be able to purchase it until 1pm on 19 June 2026, unless the placement is closed early.
This product has a duration of 5 years and offers an extra final premium equal to 0.6% if purchased at issue and held until maturity in 2031. The minimum guaranteed rate is then 1.60% which can only be changed upwards at the closing of the placement based on market conditions.
The coupons of this bond are semi-annual and calculated on the basis of the fixed rate (guaranteed even in the event of deflation) and the national inflation rate recorded by Istat in the reference semester.
The amount of the coupons is then calculated by applying the six-monthly fixed rate to the nominal capital revalued with the inflation rate recorded in the reference semester.
As regards the reference rate, it is the Foi index or the Istat index of consumer prices for families of employees and workers net of tobacco.
As with other multi-year Treasury bonds, it also benefits from:
- a preferential tax rate of 12.50%;
- exemption from inheritance tax;
- of the exclusion from movable assets for ISEE purposes of up to a total of 50,000 euros in government bonds, according to current legislation.
Furthermore, during the placement days, no purchase commissions apply to this security, the minimum denomination is 1,000 euros while the investment is not time-bound.
Finally, the Btp Italia Si can be subscribed to at Poste Italiane and through banks authorized for placement.
As regards the right of withdrawal, it is not applicable to orders placed online and executed on Mot during the placement period. The latter is the electronic bond market managed by Borsa Italiana on which purchase and sale contracts relating to national and foreign bonds and government bonds are traded from 9am to 5.30pm during the opening days of the Stock Exchange.
How do inflation-linked government bonds work?
Inflation-indexed government bonds are instruments designed to protect the purchasing power of savers.
They work like this: when inflation increases, the revalued capital on which the periodic coupons are calculated also increases. In this way the investor can limit the effects of the increase in the cost of living. Their return depends on several factors such as central bank decisions, price movements and the general level of interest rates.
If inflation in the euro area were to stabilize around 2-3% in the near future, this type of security could offer higher returns than traditional BTPs depending on market conditions and duration. In the case of higher and persistent inflation, yields could be higher, otherwise lower.
What other securities protect against inflation?
In addition to Btp Italia Sì, there are also other instruments that protect savings from inflation such as Btp€i. These are multi-year bonds issued by the Treasury and linked to the trend of inflation in the Eurozone. These products, unlike the Italian BTPs, do not follow the trend of consumer prices in Italy but are linked to European inflation. In fact, they allow you to benefit from the growth in the cost of living in the entire euro area. They are used mainly by pension funds, insurance companies and institutional investors to create a diversified portfolio but can also be purchased by small savers via the secondary market. Compared to Italian BTPs, however, maturities can be longer and even reach 30 years.
Other European countries also offer similar securities such as Germany where inflation-linked Bunds are regularly placed which are considered very safe thanks to the reliability of German public debt even if the yields are often lower than those of Italian securities.
What risks should you consider before investing?
Despite being able to protect savers’ purchasing power, inflation-linked government bonds are not totally risk-free. Precisely for this reason, careful evaluations must be made before signing them. First of all, it is important to consider interest rates: when market rates remain stable for a long time or rise, in fact, if you want to sell before the maturity you could obtain a lower price than the purchase price with possible capital losses.
The future inflation scenario must also be considered. Indexed BTPs are very effective when the price increase is sustained or higher than expected. In the event of low or slowing inflation, however, the advantage compared to traditional BTPs is greatly reduced and in these cases the yield may be lower than that of fixed rate bonds.
It is also necessary to consider that the government bond market is very large and subject to frequent issues and refinancing, this contributes to the liquidity of the securities but does not eliminate price variations due to economic conditions and investor expectations.
The management of the investment over time should not be underestimated, especially if you want to keep the BTP until maturity. In these cases, the timing risk, i.e. the moment at which one enters or exits the investment, must be assessed. If a security is purchased when rates are still high and then begin to fall, the value of the securities on the secondary market may increase, thus generating a possible capital gain in the event of an early sale. Otherwise, however, the price of the security can reduce even if there is good protection from inflation.
For all the reasons indicated, the advice is to invest money in these instruments especially for long-term investments, avoiding overly speculative short-term approaches. Another suggestion is to diversify the durations by purchasing BTPs with different durations so as to reduce the impact of rate variations.
Finally, we must always remember that the choice between fixed rate BTPs and indexed BTPs does not only depend on inflation forecasts but also on the tolerance one has for risk and the personal need for return.
