What is a State note?

Miscellaneous hunk9000 August 7, 2016 0 0
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The last two months of 2011 puts European countries in a true Euro Crisis. Discussions are taking place about the future of the euro, and more and more countries are in financial difficulties. Belgium has been able to supplement its resources by issuing government bonds. In 2011 the major problems began with financial problems in Greece. Arose shortages of billions which were difficult to absorb by the other European countries. It soon became clear that there were several countries that Europe had to worry about. Belgium also came billion deficit. The help came from an unexpected source, namely the still financially strong citizens.
The government has called on its citizens to lend money to Belgium by buying government bonds. In a short period is for three billion sold to government bonds.

What is a State note?

The description Government bonds is used in Belgium as the plural of State note. These are loans which, in this case by the Belgian State were issued. The Belgian State also acts as guarantor for the repayment of these notes. In that respect it is to compare it to a regular savings. The ability to invest, is only open to individuals. The investor receives in return paid a fixed rate. Entry can only for a short period, but the government bonds are also traded. Depending on interest rates could be government bonds worth more or less. Netherlands is the State note is known as the government bond.

When they are issued?

The issuance of government bonds is once every three months, the months of March, June, September and December. During the subscription period, individuals may enroll in the state notes. At the fair, they are available as well, with the price may be higher or lower compared to the issue price.

Maturity, yield and taxation

The maturity of government bonds can be a period of three years or five years or seven years. The interest withholding tax to be paid over 15%. The amount of the remuneration is determined by the issuance of state bonds.

Different kinds of government bonds

Besides the three options with a fixed maturity, there are also two types which slide with the term. There is a variant with a duration of five years to extend still is a period of two years. In addition, there still exists a possibility to maintain a period of 7 years, with the possibility of intervening in order to make the withdrawal again.

Disadvantages of the State Note

Upon the issue of the level of interest is determined. Rising interest rates can not be benefited. Another disadvantage is the term of the State note. You can not prematurely withdraw your money back from the investment. In that case you have to sell the claim. Depending on the current interest rate you can get a lower yield, but the yield may also be higher.

Only money that you can miss extended time

The State note should not be seen as a way to temporarily put money on the way. You should be able to miss the money for the defined period. If you can not, you run the risk of having to prematurely sell the investment at an unfavorable price.
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