Almost 180,000 children have Baby Bonds in Hungary

State secretary András Tállai said the following:

• the new stock of Baby Bonds rose 29% year on year in the firs ttwo months;
• according to FinMin data, a total of about 3,500 Start accounts have been opened in January and almost 3,400 in February;
• the spectacular rise in the number of Baby Bond holders started last years, as the number of new account openings exceeded 3,000 in October 2018, as well;
• the stock of Baby Bonds could reach a new record this year. At the end of February, 178,000 children had money invested in this security in the value of more than HUF 60 billion.

We have previously reported that after the government has done away with the home savings scheme (LTP or Business Society Funds), Baby Bonds have become the form of regular savings that offer the highest guaranteed yield in Hungary. On top of the one-off HUF 42,500 state subsidy, the state pays 10% (but no more than HUF 6,000) annually of the family’s investments. The real advantage of the security is its high interest, which is 5.8% this year.

About the Baby Bond

• A HUF 42,500 start-of-life subsidy has been available to all Hungarian-born citizens who reside in the country since 2006.
• The State Treasury took over exclusive management of the baby bonds in the autumn of 2012. Parents, grandparents and other relatives can open the Start accounts to make savings for children in the family.
• Baby Bonds are government securities with a term of 19 years which can only be purchased to Treasury Start securities registration accounts.
• They have an annually variable interest rate, and the interest payable is the sum of the basic interest, linked to the change in the consumer price index of the previous year, plus the interest premium. Their face value is HUF 1.
• For the first series (2032/S), interest payment is due on 2 December each year; for subsequent series, interest payment takes place on 1 February each year.
• All payments made to the account, as well as interest credited in the course of the term, are automatically invested in securities with the same serial number, based on a standing order.
• Treasury Start Securities Registration Accounts can be opened for all children who have a residence in Hungary, are Hungarian citizens and are Hungarian citizens or a parent of Hungarian nationality living abroad and with a Hungarian identity card, are under the age of 18.
• The account can only be opened if the child has no Start account with any other account holder, or if the termination of that account is initiated due to the transfer of the Start account to the Treasury.

• Tags:
• economy,
• government security,
• baby bond