Senior Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) is issuing a seven percent savings bond and has invited subscription from individual and business investors.
The apex bank indicated that the seven percent savings bond with a tenure of between one year and five years was being issued to provide investors platform to save and invest in high yielding instruments.
“RBZ hereby invites investors:-individuals, companies, pension and provident funds, insurance companies, life mutual, financial institutions and other interested institutions in Zimbabwe to subscribe for the seven percent savings bond,” said the Central Bank.
It said applications should be for a minimum $100 for both corporate bodies and individuals.
“Purpose of issue is to provide investors with a platform to save and invest in high yielding instruments.”
Special features of the savings bond include, liquid asset status, rolling maturities of one year, two years, three years and five years, simple interest fixed rate of seven percent per annum calculated on a 365 day basis, tax free interest, acceptable as collateral and bearer instrument. Other features of the seven percent savings bond were a bearer instrument and a discount window at the RBZ 30 days after issuance for individual and 180 days for other investors.
Application forms are obtainable at RBZ, commercial banks, building societies and People’s Own Savings Bank. Efforts to get a comment from RBZ Governor Dr John Mangudya and his Deputy Dr Kupukile Mlambo were fruitless as they were not reachable on their mobile phones.
A financial analyst who cannot be named for professional reasons said the issuance of a bond by the Central Bank could be part of measures by the monetary authority to raise capital on behalf of Government.
“The finer details of how much is being raised and for what use the capital is intended and terms will be in the indenture. Instead of leaving one’s money in the bank with little or no interest, the financial analyst said, individuals or companies can invest in the savings bond.
“Savings bonds are meant to be an alternative to savings accounts held with banks. They are an opportunity for investors to save their money and earn a return. They are typically used where the Government is targeting to raise money from what are considered retail investors that is ordinary men and women as opposed to institutional investors. Ordinary bond issues are usually targeted at large institutional investors as shown by the large minimum subscription values, which are ordinarily over $1 million,” said the analyst.