How to help the Armed Forces: all about military bonds

Administrative Law
07.09.2022
Law Services - How to help the Armed Forces: all about military bonds

🫂 Now more than ever, Ukrainians are united and looking for any opportunity to help the country and our defenders in the fight against the enemy. Someone joins the ranks of the Armed Forces and Terrodefense, someone chooses the path of a volunteer, and someone tries to work and direct funds to the defense of the country.

The state offers another effective tool for supporting the Armed Forces – military bonds, because it is not only a contribution to victory, but also an opportunity for reliable investment.

On February 25, 2022, the government adopted a resolution on issuing bonds of the domestic state loan “Military Bonds”. With the help of this financial instrument, the CMU plans to attract up to UAH 400 billion.

An important financial tool for supporting the Armed Forces is the placement of military bonds. Since March 2022, the Government has been continuously holding auctions of such state-targeted securities.

After the placement of military bonds, the state receives funds, which it directs to finance the needs of the country and the Armed Forces in conditions of martial law.

It is important to understand that the targeted use of funds is guaranteed by the relevant decrees of the President on the introduction of martial law on the territory of Ukraine, where the Government is tasked with ensuring full financing of the needs of the Armed Forces. In addition, the timely return of invested funds and interest is guaranteed.

It should be remembered that the state attracts funds for a certain period – from 3 to 6 months. The percentage of profitability is determined during the auction, but not less than 10% in hryvnia and 3.5% in foreign currency.

There are also bonds with longer maturities – for 1 and 3 years. In this case, the interest rate increases, and investors are paid a regular coupon (interest) every 6 months during the bond’s life cycle.

Securities can be purchased in the following currencies:
hryvnias;
euro;
US dollars.

You can buy military bonds through dealers – financial institutions (most often – banks). The Bank participates in auctions for placement of military bonds on the primary market on its own behalf, but on behalf of, in the interests and at the expense of the client – a natural or legal person.

Income from military bonds is not taxed and is not subject to military levy.

Military bonds, by the way, can be a gift or an inheritance – their effect will continue throughout their life cycle.