Treasury Bonds are considered to be medium and long term monetary instruments, of which the maturity period ranges from 2 to 20 years.
The Essentials
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Interest and maturity proceeds are guaranteed by the Government
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No withholding tax will be deducted from the earnings
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Your investment is secure as there is zero default risk
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Pre determined fixed rate throughout the life period of the Bond
Benefits of Treasury Bonds
Treasury Bonds have zero default risk, since the payment of interest and maturity proceeds are guaranteed by the Government.
Unlike a Treasury Bill, you as the holder of a Bond will be entitled to semi-annual periodic interest payments (coupon interest) which is paid at a pre-determined fixed rate during the life of the bond. Depending on the yield and the coupon rate, the price (per 100 rupees) of a bond, can either be more than Rs. 100 (premium) or below Rs. 100(discount).
No withholding tax.
Yield rates are flexible and determined by market forces.
Easy convertibility to money even before maturity (discounting).
You will receive possibilities for capital gains.
Easy transfer of ownership of a Treasury bond.
Utility as a mean of collateral i.e. ability to enter into Reverse Repo transactions and other loan facilities etc....
You can collect interest and maturity proceeds without a hassle.
In an interest rate declining environment, you can achieve capital gains by selling the instrument.
In an interest rate rising environment, you can enhance the rate of return by investing the coupon interest receipts at a higher rate.
Eligibility
a. Resident individuals.
b. Corporate bodies incorporated in Sri Lanka.
c. Foreign institutional investors including country funds, regional funds or mutual funds.
d. Corporate bodies incorporated outside Sri Lanka.
e. Citizens of foreign states whether residing in Sri Lanka or outside Sri Lanka.
f. Non resident Sri Lankans.
are eligible to apply for Treasury Bonds.
If you fall in to the category of investors from c to f as mentioned above, you should invest through Securities Investment Account and securities will be allocated for same after inquiring the availability in the leeway from the Central Bank
Placing a Treasury Bond
You can visit a branch of your choice and discuss your requirement with an officer.
Interest rate applicable for Treasury Bills can be viewed through the rates and tariffs page of this site.
Please fill the relevant application form and hand it over to the branch. Remember to take your national identity card, driving license or passport. This is necessary for us to identify you.
Withdrawals
Once a formal request is forwarded to the Treasury Department, your Treasury Bills will be discounted based on the market rates.
Terms & Conditions apply
Product information and terms & conditions are subject to change from time to time.
Therefore, it is advisable to contact the branch nearest to you for the latest information and prevailing terms & conditions.
