EDO vs TOS Bonds — Which to Choose in 2026? Comparison

EDO vs TOS Bonds — Duel of Two Most Popular Government Bonds

EDO and TOS bonds are the State Treasury's flagship products, offering a safe way to invest savings with interest rates linked to the NBP reference rate. In 2026, EDO at 5.75% and TOS at 6.0% represent an attractive alternative to bank CDs and savings accounts.

Freenance provides a detailed comparison of both bond series, analyzing not only interest rates but also flexibility, interest rate risk, and optimal allocation strategy depending on investment horizon.

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Quick Comparison — Decision Table

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Detailed Bond Characteristics

EDO — One-Year Flexibility

Basic parameters (February 2026 issue):

• Full name: One-Year Bonds
• Period: 12 months from issue date
• Interest rate: 5.75% annually (as of February 2026)
• Face value: 100 PLN per bond
• Minimum amount: 100 PLN
• Maximum amount: No restrictions
• Interest payment: After one year, together with principal
• Early sale possibility: After one year to the State Treasury

Interest rate mechanism:

• Fixed interest rate throughout the entire period
• Rate set on issue date based on NBP reference rate
• No risk of interest rate changes during the term

TOS — Two-Year Perspective

Basic parameters (February 2026 issue):

• Full name: Two-Year Bonds
• Period: 24 months from issue date
• Interest rate: 6.0% annually
• Face value: 100 PLN per bond
• Minimum amount: 100 PLN
• Maximum amount: No restrictions
• Interest payment: After 2 years, together with principal
• Early sale possibility: After 2 years to the State Treasury

Interest rate mechanism:

• Fixed interest rate throughout the entire 2-year period
• Higher premium for longer capital lock-up
• No possibility of early sale without losing interest

Interest Rate and Return Analysis

Comparison with Market Alternatives

As of February 2026:

Net Profit Calculation

Scenario: 100,000 PLN for maximum period

EDO — 12 months (5.75%)

• Gross interest: 100,000 × 5.75% = 5,750 PLN
• Withholding tax (19%): 1,093 PLN
• Net interest: 4,657 PLN
• Effective rate of return: 4.66% net

TOS — 24 months (6.0%)

• Gross interest for 2 years: 100,000 × 6.0% × 2 = 12,000 PLN
• Withholding tax (19%): 2,280 PLN
• Net interest: 9,720 PLN
• Effective rate of return: 4.86% annually net

Difference: TOS gives 0.20 percentage points more annually (after tax)

Risk and Flexibility Analysis

EDO — Short-Term Advantages

✅ Advantages:

• Lower interest rate risk — can reinvest after one year
• Greater flexibility — faster access to funds
• Easier planning — annual budget cycle
• Ability to react to market changes every 12 months

Scenarios favoring EDO:

• Expected interest rate increases — reinvestment opportunity after one year
• Macroeconomic uncertainty — shorter lockup
• Potential need for funds within 1-2 years

TOS — Long-Term Advantages

✅ Advantages:

• Higher interest rate (6.0% vs 5.75%)
• Protection against rate drops for 2 years
• Fewer transactions — buy and wait 2 years
• Compound effect when reinvesting the whole amount

Scenarios favoring TOS:

• Expected interest rate declines — locking in higher rate for 2 years
• Stable financial needs — certainty of no need for funds
• Return maximization — every tenth of a percentage point counts

Interest Rate Risk — Key Difference

Scenario: NBP rate increase to 7% after one year

EDO strategy (reinvestment after one year):

• Year 1: 5.75% on original amount
• Year 2: 7% on increased amount (new bonds)
• Effective 2-year return: ~6.4%

TOS strategy (2-year lock-in):

• Year 1-2: 6.0% on original amount
• Effective 2-year return: 6.0%
• Opportunity cost: -0.4 percentage points

Conclusion: EDO better with expected rate increases, TOS with expected declines.

Availability and Purchase Process

Where to Buy EDO and TOS Bonds

Cooperating banks:

• PKO BP: Widest access, all branches
• Bank Pekao: Available in larger branches
• mBank: Through internet platform and branches
• Santander: Limited availability
• ING: No government bond sales

Poczta Polska (Polish Post):

• All postal outlets
• Cash purchase option
• Service in Polish
• No additional fees

Online (ERP system):

• treasury.mf.gov.pl: Official Ministry of Finance platform
• Registration required: Trusted Profile or e-ID
• Payment: Bank transfer
• Confirmation: Automatic in system

Step-by-Step Purchase Process

Through bank:

1. Branch visit with ID document
2. Application completion — series and amount selection
3. Fund deposit — cash or account transfer
4. Purchase confirmation — document with series number
5. System registration — automatic

Online through ERP:

1. Trusted Profile login at treasury.mf.gov.pl
2. Series selection — EDO or TOS from current issue
3. Amount specification — minimum 100 PLN
4. Transaction confirmation — qualified electronic signature
5. Fund transfer — within 2 business days

Freenance Recommends: Optimization Strategy

🎯 Laddering Strategy

For 200,000 PLN:

• 100,000 PLN in EDO (maturing in one year)
• 100,000 PLN in TOS (maturing in 2 years)

Benefits:

• Average interest rate: 5.875% (weighted average)
• Regular cash flow: 100,000 PLN + interest per year
• Flexibility: Annual reinvestment decision for part of funds

🎯 EDO Rotation Strategy

For those uncertain about future rates:

• Buy only EDO bonds
• Every 12 months assess macroeconomic situation
• Reinvest in best-paying available instruments

Advantages:

• Maximum flexibility
• Ability to react to interest rate changes
• Lower risk with economic uncertainty

🎯 TOS Maximization Strategy

For those confident in long-term stability:

• Invest exclusively in TOS
• Maximize interest rate at the cost of flexibility
• Reinvest everything after 2 years in best available instrument

Justification:

• +0.25 percentage points annually vs EDO
• On 100,000 PLN = +50 PLN annually net
• Compound effect with multi-year strategy

Tax and Legal Aspects

Interest Tax

Same rules for EDO and TOS:

• Withholding tax: 19% on interest
• Automatic deduction: When redeemed by State Treasury
• PIT-8C: Automatic reporting to tax office
• No obligation: To show in PIT return

Tax calculation example:

• Gross interest: 5,000 PLN
• Tax (19%): 950 PLN
• Net payout: 4,050 PLN

Inheritance and Transfer

Legal rules:

• Inheritance: Bonds transfer to heirs
• Estate value: Face value + accrued interest
• Inheritance tax: According to applicable rates
• Continuation: Heirs receive funds after maturity

Macroeconomic Decision Context

Interest Rate Situation in Poland (2026)

Current state:

• NBP reference rate: 5.50% (February 2026)
• CPI inflation: 4.2% (January 2026)
• Real interest rate: +1.3%
• Trend: Stabilization after 2021-2024 hike cycle

2026-2028 Scenarios

Scenario A: Rate cuts (40% probability)

• NBP lowers rate to 4.0-4.5% within 18 months
• New bonds will have lower interest rates
• Strategy: TOS better (lock in higher rate)

Scenario B: Stabilization (35% probability)

• Reference rate 5.0-5.5% for next 2 years
• Similar interest rates for new issues
• Strategy: EDO and TOS comparable

Scenario C: Rate hikes (25% probability)

• NBP raises rate above 6% due to inflation
• New bonds will have better interest rates
• Strategy: EDO better (reinvestment flexibility)

Alternatives to Consider in 2026

Other Government Bonds

COI (3-year):

• Interest rate: 6.25% annually
• Period: 36 months
• Advantage: Highest interest rate
• Disadvantage: Longest lockup

ROR (10-year variable rate):

• Interest rate: WIBOR 6M + 1.25%
• Period: 10 years
• Advantage: Long-term inflation protection
• Disadvantage: Very long period, interest rate risk

Competitive Banking Products

Structured deposits:

• Interest rate: Up to 7% in first period
• Risk: Higher than bonds (bank risk)
• Limits: Usually up to 100,000-200,000 PLN

Promotional savings accounts:

• Santander: 6.5% for 4 months
• Nest Bank: 5.8% for 6 months
• Advantage: Higher short-term rates
• Disadvantage: Limited in time and amount

Summary — Final Recommendations

The choice between EDO and TOS bonds has no universal answer — it depends on your investment horizon, interest rate expectations, and need for flexibility.

Freenance recommends:

🥇 EDO for Flexibility (⭐⭐⭐⭐⭐)

Choose EDO if:

• Uncertainty about future interest rates
• Possible need for funds within 1-2 years
• You prefer annual decision cycles
• You expect NBP rate increases

Investor profile: Cautious, seeking flexibility

🥈 TOS for Maximization (⭐⭐⭐⭐)

Choose TOS if:

• Certainty of no fund needs for 2 years
• You maximize returns for acceptable risk
• You expect stabilization or rate decline
• You prefer "buy and forget" strategy

Investor profile: Stable, long-term

🥉 Mixed Strategy (⭐⭐⭐⭐⭐)

Split funds 50/50:

• Half in EDO — flexibility and reaction ability
• Half in TOS — higher return and protection
• Average interest rate: 5.875% while maintaining partial flexibility

Final assessment:

• EDO: ⭐⭐⭐⭐⭐ — universal choice for most
• TOS: ⭐⭐⭐⭐ — good for stable financial situations

Key advice: Regardless of choice, government bonds are an excellent alternative to bank CDs — 100% safe, competitive interest rates, and no amount limits.