The demand boom forces the Bank of Spain to impose the pre-appointment to acquire treasury bills
The uproar over Treasury bill profitability has sparked demand from many individuals entering the world of investment for the first time, even if in the most conservative way possible. What should you do to buy debt?
Bills, bonds and debentures can be obtained through various channels. The first, a bank or securities firm. The second, the Bank of Spain’s own offices, which requires an appointment by phone 913385000 or through its website from today.
In addition to the money to be invested, to open the account you need proof of identity (with a copy) and the bank account details of the account holder, which can be entered by bank transfer. It can also be purchased through the Treasury website, with the digital certificate or electronic DNI, always at least seven days before the day of the auction.
The convenience of leaving the purchase of titles to the bank or a broker also means higher costs due to the commissions they charge. Currently they are between 0.2% and 0.3%. Opening an account with the Bank of Spain is free, although you have to pay the commission in case of cash transfer.
This amounts to “1.5 promille with a minimum of 0.9 euros and a maximum of 200 euros.” That is therefore 1.5 euros for the minimum nominal amount of 1,000 euros. A pre-payment of 101% of the requested amount is also required. For example, if that minimum of 1,000 euros is invested, you must deposit 1,010 euros per title. Please note that requests greater than this minimum must always be a multiple of 1,000.
Treasury bills have always been part of the most conservative portfolios because of their low risk. After all, the investor only stops collecting when the State – which issues them to finance itself – goes bankrupt, which is practically impossible.
Because they are short-term securities (three, six or 12 months), their variation risk is lower for investors who, for whatever reason, wish to exit their position before expiration.
In these cases of early redemption of money, it is necessary to go to the secondary market where these types of titles have been negotiated. There they can be sold at the price at which they are currently quoted through a broker who charges the corresponding commission.
In the case of bills of exchange, investors will have to declare the profit they made on their investment as return on movable capital, for which they will be taxed at 19% for the first €6,000, 21% for the next €44,000 and from there. up to 23%.
Another formula for investing in government debt is through investment funds. The main advantage is the daily liquidity and the fact that the investment can be transferred from one fund to another at any time, without having to pay taxes. It only passes through the Treasury once the holding has been sold and that profit has been made. The disadvantage? Commissions that are usually around 0.25% for management and 0.10% for the down payment.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
