The national debt to be bought says R 1. What does that mean?

According to Xinhua News Agency, the Ministry of Finance has decided to issue 2020 special book-entry anti-epidemic treasury bonds (Phase I) and 2020 special anti-epidemic treasury bonds (Phase II), with a scale of 50 billion yuan and a term of 5 years and 7 years respectively. The two issues of government bonds will be tendered on June 18, and will be listed and traded on June 23.

Different from ordinary national debt, anti-epidemic special national debt is issued under the background of epidemic prevention and control. What's the difference? Are individual investors worth buying?

What is special national debt?

Let's first understand the concept of national debt:

National debt is a kind of government bond issued by the government to raise financial funds. In essence, it is a kind of creditor's rights and debt certificate based on national credit, which is issued to investors through certain legal procedures and promises to repay the principal and interest within the specified time.

National debt is not only recognized as the safest investment tool, but also its interest rate is an important benchmark to measure the average market yield.

Then why issue government bonds? In fact, national debt is something that the state borrows money from citizens to do. Then why should others believe you? Generally speaking, when the government establishes rule, it has authority, and with authority, it has national credit. For example, after the establishment of China * * * Production Party1/year, that is 1932, it issued a total of 1.8 million yuan of national debt in Jiangxi revolutionary base area.

Why issue special government bonds?

Previously, national debt was an important channel for the central government to overcome financial difficulties and raise construction funds. At present, special treasury bonds are also issued for specific purposes, which has become one of the important goals of ordinary people's investment. To put it bluntly, the special anti-epidemic national debt was also issued under the condition of "lack of money".

According to the data disclosed by the Ministry of Finance, in the first quarter of 2020, the government's public budget revenue decreased by 14.3%, and the fiscal revenue of most other provinces also experienced negative growth in the first quarter.

In order to alleviate the decline in consumption, fiscal revenue and subsidies caused by the epidemic. According to this year's "Government Work Report", it is planned to issue 1 trillion yuan of special anti-epidemic bonds.

According to the statistics of Great Wall Securities, * * * issued two special bonds in the history of our country:

First, 270 billion yuan of 30-year special treasury bonds were issued with 1998, which was mainly used to supplement the capital of state-owned banks seriously damaged in the Asian financial crisis, so as to improve the ability of the financial system to resist risks; The other time was in 2007, when 1.55 trillion yuan was withdrawn from the directional+public offering bank, and 696.4 billion yuan of 5-year, 7-year and 10-year special government bonds were issued in a rolling way to hedge the increase in foreign exchange holdings.

It can be seen that there are not many special treasury bonds issued, but the funds raised by each issuance have important uses, and their earmarking is stronger than that of ordinary treasury bonds, that is, the funds raised are used for specific policies and support specific project needs.

What should we pay attention to about special national debt?

1. The interest rate is determined by the market. Special anti-epidemic bonds are issued in a market-oriented way, that is, the coupon rate and the interest-bearing method are determined by the market (the bond underwriting syndicate bids). This is different from the interest rate of savings bonds determined by the Ministry of Finance and the Central Bank.

It is reported that the first-phase national debt is a five-year fixed-rate interest-bearing bond, and the second-phase national debt is a seven-year fixed-rate interest-bearing bond, which is issued by competitive bidding with a total face value of 50 billion yuan. The two issues of national debt are scheduled for bidding on June 18 and will be issued until June 19.

2. Because it is a market-oriented issuance method, the investment money comes from the market, not the newly issued currency. Commercial banks spend money to buy special treasury bonds issued by the Ministry of Finance. The balance sheet of the central bank shows that the reserve currency (liabilities) has decreased and the government deposits (assets) have increased, but it is only the adjustment of the asset and liability structure. Therefore, it will not cause too much fluctuation in market liquidity. However, if it is a full public offering, it will absorb market liquidity.

3. The special anti-epidemic national debt is issued by market bidding, but it does not mean that it is completely publicly issued. According to the agency's guess, if the mixed mode of "orientation+openness" is adopted, then individuals can only buy a small part.

What is the impact of special national debt?

1. For the country and the market, since the special national debt is earmarked, the money must be used for anti-epidemic related expenses to alleviate the losses and negative effects caused by the epidemic. According to the government work report, the funds raised by the special national debt "are mainly used for local public health and other infrastructure construction and anti-epidemic related expenses, and some funds are reserved for local governments to solve special difficulties at the grassroots level, ensure employment and protect people's livelihood. It is used to increase investment in research and development of vaccines, drugs and rapid detection technologies. " To put it bluntly, our money was lent to the country to win the "war epidemic". What we bought was not debt, but feelings.

2. For individuals, the interest rate of issuing special treasury bonds is slightly lower than that of ordinary treasury bonds. According to the relevant person in charge of the Treasury Department of the Ministry of Finance, the yields of 5-year, 7-year and 10-year book-entry treasury bonds are about 2.5%, 2.8% and 2.8%, while the current 5-year fixed deposit and withdrawal interest rate is about 2.75%, which is not particularly high. This is a good investment channel.

Are ordinary people worth buying? How to buy?

First of all, according to coupon rate with book-entry treasury bonds, the annual interest rate of special treasury bonds is expected to be around 2.4%-2.7%, which is not much different from deposits in terms of profitability, security and liquidity. For investors with low risk appetite and more spare money, they can consider buying. If you are a radical investor, you need to consider it. After all, the national debt has the problems of general liquidity and low yield.

Secondly, considering that the net issuance of government bonds will reach 1 trillion yuan in June, the increase in the supply of trillion special bonds will lead to pressure on the bond market, so there will still be bond market fluctuations during the purchase of government special bonds, and investors need to be mentally prepared.

So, if you want to buy it, how should you buy it?

At present, we can buy at the counters of banks that offer book-entry treasury bonds, such as Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and China Merchants Bank.

According to the data of the Ministry of Finance, from 2065438 to 2020, 40 institutions including China Agricultural Bank, China Industrial and Commercial Bank, China Construction Bank, Postal Savings Bank, China Bank, Bank of Communications and China Merchants Bank were all members of the savings bonds underwriting syndicate. In other words, at present, all the banks we know can basically buy special government bonds.

It should be noted that since special treasury bonds are book-entry treasury bonds, investors must open special treasury bonds accounts on the basis of bank accounts and securities accounts before purchasing them. For securities accounts, you need to open a capital account with a securities institution to purchase book-entry treasury bonds. Another thing to mention is that book-entry treasury bonds can be traded on the market, so they can be transferred in the market without having to hold them until maturity.

According to the author's understanding, at present, in the online banking APP of Bank of Communications, there is already an entrance for the purchase of this special anti-epidemic bond, and in the online banking APP of Bank of China, there is also an entrance for the purchase of previous anti-epidemic bonds.

In short, under the current severe internal and external environment and low rate of return, special national debt, a low-risk investment, is a good way to save money.