Book-Entry Bonds

1.1 Book-entry bonds

Definition:

Book-entry bonds, also known as paperless bonds, are issued by the Ministry of Finance through paperless computer book-entry method, and they can be traded on the market.

Book-entry bonds record creditor's rights in book-entry method. Through trading system of securities exchange, the debt can be issued and traded. The Book-entry bonds can record name and report loss. Investors must set up an account in the securities exchange to trade Book-entry bonds. Book-entry bonds have high efficiency, low cost and a safe trading process.

Features:

1. The safety of funds: Government bonds are issued based on the country's reputation. The Ministry of Finance is obliged to repay the principal when the bonds mature.

2. Exempt from tax on interest: The interest of government bonds is tax-free. Book-entry treasury bonds investors can have not only higher interest rates but also tax-free interest.

3. High yields: Currently the yield of government bonds traded in exchange market is higher than the savings deposit rate and the yield of saving bonds issued in the same period

4. Convenience to buy: After opening an investment account, investors can subscribe government bonds at any time on the trade date.

5. Variety and selectivity: 29 book-entry treasury bonds have been listed for trading for a period ranging from 1 to 20 years.

6. Good fluidity: The book-entry treasury bonds can be traded at any time through the securities market.

1.2 Savings Bonds (Certificate)

Definition:

Certificate treasury bonds, refers to the government bonds that government issues without Physical coupons and through the method of Treasury certificates of receipts. It uses the government bonds certificates of receipts as a proof of claims. it is non-listing and non-transferable, interest is accrued from the date of purchase. During the period of holding, if the bond holders face special circumstances and need to redeem it, they can redeem in advance from the outlets. When the government bonds are redeemed in advance, except for the repayment of principal, it will calculate the coupons according to the actual number of holding days and the corresponding interest rate grade. Additionally, agencies will charge a fee payment for 2 ‰ of principal.

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