In 2026, domestic government bonds (OVGZ) remain one of the most reliable and attractive instruments for private investors. These bonds allow citizens to invest funds under state guarantees, earning a yield that often exceeds bank deposits while remaining tax-exempt. Financial expert Andriy Shevchyshyn explained in an interview with RBC-Ukraine the mechanics of these securities, their advantages over traditional savings accounts, and key risks for investors.
Mechanics and Accessibility of Government Bonds
Domestic government bonds are debt securities issued by the Ministry of Finance to raise funds on the domestic market. Initially, they are sold to banks, which then offer them to retail investors. Citizens, legal entities, non-residents, and licensed investment companies are eligible to purchase these securities.
Today, the entry barrier to this market is minimal thanks to modern digital services. Investors can purchase bonds through mobile banking applications or the state platform 'Diia'. Commission fees vary depending on the financial intermediary: some platforms charge no fees at all or set a symbolic flat rate.
Advantages of Bonds Over Bank Deposits
The primary financial argument in favor of bonds is taxation. Bank deposit income is subject to a personal income tax of 18% and a military levy of 5%, totaling 23%. Consequently, a nominal deposit yield of 15% per annum drops to approximately 11.55% after taxes.
In contrast, income from domestic government bonds is paid in full without any deductions, including coupon payments. Furthermore, unlike term deposits, which are difficult to terminate early without losing accumulated interest, government bonds can be sold on the secondary market at any time while retaining the principal capital.
Currency Risks and Specifics of Foreign Currency Investments
Alongside hryvnia instruments, foreign currency bonds exist on the market. However, their supply in 2026 is limited due to active currency restrictions, as regulators are purposefully reducing volumes following past usage for bypassing bans. Finding such securities may require additional effort from the investor.
The main difference between foreign currency bonds and simply purchasing cash dollars or euros is regular coupon payments from the state. Buying foreign currency alone does not generate passive income, whereas bonds provide additional returns alongside potential exchange rate fluctuations.
Early Sale Prospects and Risk Assessment
Investors can earn a return not only by waiting for official maturity but also by selling bonds ahead of schedule. The current market price accounts for accumulated coupon interest, which is compensated to the seller. Moreover, if general market rates decline, previously purchased higher-yield bonds increase in value, allowing profit from resale.
The default risk on hryvnia government obligations is assessed by experts as minimal, since the state is capable of fulfilling obligations in its national currency. In global practice, defaults on domestic debt are extremely rare and typically associated with radical regime changes or revolutionary upheavals.
