Co-founder of Affari Miei
January 26, 2024
Poste Italiane has launched 5X5 postal savings bonds. But is it worth opting for this investment? What is the performance? Which interest rates could you get? Warning: I warn you that this series at the moment is no longer in issue, and therefore the review is aimed at those who signed it when it was possible to do so.
I don’t think I’m telling you a secret by saying that vouchers are a safe instrument and, as such, not very profitable. However, in this guide I want to answer all the questions you may have asked yourself about it.
Enjoy the reading!
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Attention!
This instrument can no longer be subscribed to, so the review will only be useful to those who have already subscribed to it.
The advantages of postal savings bonds
Let’s start by examining the positive sides of these tools: in general, as anticipated, they are not particularly profitable tools. Despite this, they remain one of the favorite investments of Italians.
All postal savings bonds are issued by Cassa Depositi e Prestiti and placed on the market by Poste Italiane: it will be precisely because we find Poste Italiane behind it that investors feel reassured and decide to invest here.
What certainly convinces many savers is also the fact that BFPs are securities guaranteed directly by the Italian State and are always reimbursed at their nominal value (plus interest): this makes them very safe instruments.
There are no costs for subscription, reimbursement or management, obviously excluding tax charges.
These charges, for those who don’t know, consist of a tax rate on interest equal to 12.50%, compared to 26% for deposit accounts and 20% for current accounts.
As with accounts, also i BFP however, they are exempt from stamp duty (0.20%) if the value of the portfolio is less than 5,000 euros.
Another important advantage is the fact that the invested capital is repayable at any time. It means that if you subscribe to the Bonds you do not expose yourself to the typical risks of other investment instruments, as you do not run the risk of losing your savings due to market trends. Furthermore there is no risk of having to pay fees penalties if you decide to withdraw the money early.
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Characteristics of the 5X5 offer
There are different types of savings bonds, the “5X5” ones have the peculiarity of accruing interest at 5-year intervals for a maximum duration of 25 years.
Let’s not forget that, as we said earlier, there is no real constraint, given that you can withdraw your money whenever you want.
That said, the rate of return is fixed and increasing over time, so you already know how much your capital will increase.
The interests are distributed only at the time of repayment, be it early or upon maturity, in any case, however, interest will not be paid before the end of the 5th year: this means that whoever decides to request early repayment after just 2 or 3 years will receive only the capital invested and not the interest.
Who can sign them?
All natural persons can also subscribe to a Voucher online. They can be subscribed for denominations of 50 euros and multiples for a maximum amount that can be subscribed to in a working day is 1,000,000 euros.
They are available in both paper and dematerialized form – in the first case it will be necessary to present the paper document to obtain the refund, whereas dematerialized vouchers are represented exclusively by an accounting entry made on a settlement account (postal savings account or Bancoposta current account) .
Returns
In the list below I report the value of the gross interest rates that are paid at the end of each four-year period:
At the end of the 5th year: Gross return: 0.10%; At the end of the 10th year: Gross return: 0.20%; At the end of the 15th year: Gross return: 0.40%; At the end of the 20th year: Gross return: 0.75%;
At the end of the 25th year: 1.50% gross.
You can also take advantage of the simulator on the Poste Italiane website to calculate the real return on your investment – you just need to enter the amount you intend to invest and select the number of years.
Recognition of interests: how it works
We said that in the event of a refund request before the end of the 5th year, no interest will be paid. But what happens for reimbursement requests made in subsequent years?
If the request is made after the 5th year but before the end of the 9th year, then only the interest accrued at the end of the first four years is paid, but not the interest currently accruing!
This rule also applies to subsequent cycles.
Warning: Vouchers can be time-barred
From the day after their expiry (at the end of 16 years) the bonds become interest-free, that is, they stop producing interest and after 10 years they are forfeited and can no longer be repaid. So be careful not to forget about them for years, should you decide to take them out.
Attention: this recommendation actually only applies to paper vouchers because the dematerialized ones, upon expiry, are automatically credited to the account of the person who signed them.
How to subscribe to 5X5 Interest-bearing Coupons?
You can subscribe to 5×5 vouchers in all post offices (don’t forget your identity document and tax code). Otherwise, if you have an account or savings account enabled for online services, you can subscribe to 5X5 Vouchers via BancoPosta online or with BancoPosta Click, both from the web and from the App.
Refund method
It is possible to request a refund of the Vouchers at any time, under the conditions seen above.
Paper vouchers are redeemable at any post office, in cash (within the limits of cash availability) or with alternative methods (bank money order, credit to a postal savings account or to a BancoPosta current account). Dematerialized vouchers are also redeemable online.
However, there is an important difference between titles in paper form and those dematerializedthe. For the former, the refund takes place for the entire value and in a single solution.
For the second type you can receive a refund of the entire value in a single solution, or for partial amounts equal to 50 euros or multiples, without additional costs.
Affari Miei’s opinions on the 5X5 interest-bearing coupon: is it worth it?
After having examined all the conditions of the 5×5 postal savings bonds we can conclude (and I think you will agree with me) that 1.5% for 25 years is not exactly the best investment…not even an investment of 25 years allows us to achieve noteworthy returns.
But then again this is the nature of super guaranteed, super safe and no strings attached investments.
Interest-bearing bonds cannot make us earn as much as other tools.
In reality, however, someone could use them… Although it is not my kind of tool it could answer someone’s needs…
BFP 5×5: ideal for those who don’t want to have too many thoughts
These investment tools are ideal for those who have zero tolerance for risk and do not want time constraints.
25 years is a long time but being able to request repayment of the capital at any time there is no need to plan for the future, when and if there is a need for that money it will always be there, at hand.
After all, vouchers are an investment that does not require particular attention, not even in terms of expenses, given that there are none. They are there to accrue interest, and if nothing special happens in your life you can even forget about that money until it expires.
You won’t achieve who knows what profits, but in the meantime you will enhance your capital, without having to pay commissions over the years and given that the tax treatment is favorable compared to other products.
Coupons are the wrong tool if you are looking for profits
However, if you are interested in an investment that really makes you money… this product is not for you.
You have seen it for yourself: you cannot expect large returns from this instrument, and from no instrument will you get them without exposing yourself to risks.
For more profitable medium-long term investments (but also for short term investments) There are certainly more suitable tools than postal vouchers!
Conclusions
Anyone who invests in 5×5 postal savings bonds is a saver who does not want to take many risks and who is content, willy-nilly, with collecting medium-low interest rates, even after many years, preferring the guarantee of his own capital and the absence of constraints.
You can see for yourself that the opportunities offered by the Coupons are more or less these, just take a look at the section BFP offers on the Affari Miei website. If you are not satisfied it is probably because you have the wrong tool.
Here you can find some investing tips. Don’t miss these guides!
Happy continuation!
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