Silver Bonds open for subscription until Sep 4 -- 4.25% rate

The 11th batch of Silver Bonds issued by the government opens for subscription today, offering a guaranteed minimum interest rate of 4.25%.

Some elderly residents visited banks on the first day to place substantial orders, and a bank expects the final number of applicants to potentially hit a record high.

At 4.25%, the guaranteed interest rate for this batch reaches the second-highest on record, trailing only the 5% batch offered in 2023.

Some seniors queued up to submit their applications as soon as the banks opened.

This investor says the interest rate is higher than general bank fixed deposits and thus attractive.

She bought 150,000 dollars last year and is planning to buy 880,000 dollars this year.

The target issuance size of this batch is 50 billion dollars, with each unit offered at 10,000 dollars and tenor of three years.

Interests will be paid semi-annually at a rate linked to inflation in Hong Kong, subject to a minimum of 4.25%.

Based on the guaranteed rate, holding one lot of Silver Bond for three years yields a total interest payment of 1,275 dollars.

The government may also exercise discretion to increase the target issuance size to a maximum of 55 million dollars, subject to market response.

A designated placement bank notes subscription on the first day was more vigorous than the previous issue, and subscription is expected to exceed 300,000.

The subscription period starts from today and ends at 2pm on September 4th. Hong Kong residents who turn 60 in or before 2027 holding a valid Hong Kong Identity Card will be eligible for subscription.