Hungary to double gov’t support on Baby Bonds

“Good news for families with children: we are doubling the government support on Baby Bonds,” Varga said after the Economy Cabinet’s session on Thursday.

Parents can save any amount in Baby Bonds at an interest 3 pp above the previous year’s inflation. The government adds up to HUF 6,000 to this each year.

This will now double to HUF 12,000 from next year, for both new and existing customers.

The government subsidy amounts to 10% of the amount parents pay into the baby’s account, capped at HUF 6,000. The 10% ratio will remain in place, so parents will have to save HUF 120,000 in order to get the maximum HUF 12,000 a year.

As Portfolio has reported several times, there is no other government security in the market with a similarly high real yield. It currently offers 6.3% annually. The downside is that the bond must be kept until the child turns 18, and the child will be the sole recipient of the amount.

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