EDO vs COI vs TOS — Which Polish Treasury Bonds to Choose in 2026?

EDO — 10-Year Inflation-Linked Bonds

When to Choose EDO

• Your horizon is 5+ years (ideally full 10)
• You want maximum inflation protection
• You're building a long-term savings portfolio
• You're saving for retirement or children's future
• You believe inflation in Poland may resurface

Real Returns

Year 1: 5.35% fixed (September 2026). From year 2: CPI + 2.00% with annual interest capitalization.

With average 4.5% inflation over 10 years:

• 10,000 PLN after 10 years: ~17,080 PLN (pre-tax)
• After Belka tax: ~15,735 PLN
• Real return: ~+0.81% per year (after inflation and tax)

EDO's key advantage is compound interest — interest added annually to principal generates more interest. Over 10 years, this difference is substantial.

High Inflation Scenario

At 8% inflation (like 2023):

• EDO pays: 8% + 1% = 9% per year (from year 2)
• 10,000 PLN after 10 years → ~23,670 PLN (pre-tax)
• Real return: clearly positive despite high inflation

Early Redemption Cost

• 3.00 PLN fee per bond (3% of face value)
• Loss of interest for the last period
• Redeeming after 5 years costs roughly 1.8% of accumulated value

The fee is capped by the interest accrued in the current interest period — if that interest is smaller than the fee, only the smaller amount is taken and the 100 PLN principal stays intact. Series bought before September 2024 have their own, lower fees (EDO was 2.00 PLN); the binding figure is the one in that series' issue letter (list emisyjny).

Decision Tree — Which One?

Do you need the money within 12 months?
├── YES → OTS (3 months, no penalty)
└── NO
    ├── Is your horizon 2-5 years?
    │   ├── YES → COI (4 years, inflation + 1.50%, interest paid out)
    │   └── NO
    │       └── EDO (10 years, inflation + 2% + compounding)
    └── Are you an 800+ program beneficiary?
        ├── YES → Consider ROS (6yr) or ROD (12yr) — higher margin
        └── NO → EDO

Bond Ladder Strategy

You don't have to pick just one. Many investors use a bond ladder:

1. 20% in OTS — liquidity reserve, renewed every 3 months
2. 30% in COI — medium-term goals (3–5 years)
3. 50% in EDO — long-term portfolio core

This approach combines liquidity with inflation protection. Each quarter, when OTS matures, decide: renew OTS or move funds to COI/EDO.

Common Mistakes

1. Buying only OTS — you're losing purchasing power to inflation
2. Redeeming EDO after 2 years — you lose interest and pay a penalty; COI would have been better
3. Ignoring compounding — the gap between COI and EDO grows over time
4. Comparing only nominal rates — always calculate real after-tax returns

FAQ

Can I buy all three types simultaneously?

Yes — there's no limit on how many types you hold. You can own OTS, COI, and EDO in any proportion at the same time.

What happens if inflation drops to 0%?

COI and EDO pay at minimum the margin (1.50% and 2.00% respectively), so even at zero inflation you earn the margin; the first year is fixed anyway (4.75% / 5.35% in the September 2026 offer). The rate won't go negative.

Is EDO worth buying for less than 10 years?

EDO makes sense if you can hold for at least 4–5 years. For shorter periods, COI is a better choice — lower early redemption penalty and similar inflation protection.

How do I check current interest rates?

Current rates are published on obligacjeskarbowe.pl before each issuance (usually at the beginning of each month). Freenance automatically tracks the rates on your bonds.

Are Treasury Bonds subject to Belka tax?

Yes — all types are subject to 19% capital gains tax. The tax is automatically withheld when interest is paid or bonds are redeemed.

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• Polish Treasury Bonds Complete Guide 2026 — All Types Explained
• Inflation-Linked Bonds (EDO) — How Do They Work?
• Polish Treasury Bonds vs Bank Deposits — Which Is Better in 2026?