Government bonds — what are they? Types and how to buy

Quick Answer

Government bonds are debt securities issued by the State Treasury — by buying one you lend money to the state, which commits to return it with interest at a set time, making them one of the safest forms of capital investment in Poland. Retail savings series (OTS, DOS/DOR, TOS, COI, EDO, ROS/ROD) are bought directly through obligacjeskarbowe.pl from a minimum of 100 PLN, with COI and EDO indexed to CPI inflation; wholesale bonds trade on the WSE Catalyst market. Interest is taxed at 19%, but is avoidable inside an IKE account. This is educational information, not investment advice.

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Definition

Government bonds are debt securities issued by the State Treasury, represented by the Minister of Finance. By buying a bond, you lend money to the state, which commits to return it with interest at a specified time. They are considered one of the safest forms of capital investment in Poland.

Types of government bonds

Savings bonds (retail)

Available to individuals, purchased directly through obligacjeskarbowe.pl:

Wholesale bonds (market)

Listed on the WSE Catalyst market, available through brokerage account. They can be bought and sold before maturity at market price.

Why invest in government bonds?

• Safety — guaranteed by the State Treasury
• Inflation protection — COI and EDO bonds index interest to CPI inflation
• Accessibility — minimum investment is 100 PLN
• Simplicity — online purchase without brokerage account (retail bonds)
• Diversification — stable element of investment portfolio

Government bonds vs other forms of saving

Compared to bank deposits, government bonds — especially inflation-indexed ones — provide better purchasing power protection in the long term. Unlike ETFs, they don't carry market risk, but offer lower potential profit.

Tax on bonds

Interest from government bonds is subject to capital gains tax (flat tax) of 19%. Exception: bonds purchased on IKE account — there you can completely avoid tax.

How can Freenance help

Freenance allows you to track the value of your government bonds as part of your investment portfolio. It automatically includes them in net worth calculations and Financial Freedom Runway, so you see the full picture of your finances.

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FAQ

What types of Polish retail treasury bonds are there?

The main retail series are OTS (3-month fixed), DOS/DOR (short-term fixed), TOS (3-year), COI (4-year inflation-linked), EDO (10-year inflation-linked) and the family ROS/ROD bonds reserved for recipients of the 800+ benefit. They are sold directly by the State Treasury rather than on a stock exchange.

Are Polish treasury bonds covered by the BFG deposit guarantee scheme?

No, retail treasury bonds are not covered by BFG, because BFG protects bank deposits, not securities. Treasury bonds are instead backed directly by the State Treasury, which is generally considered the strongest domestic credit and is why these instruments are treated as safe in PLN terms.

Which bonds best protect against inflation?

COI (4-year) and EDO (10-year) bonds index their coupons to CPI inflation plus a fixed margin, so they are designed to preserve purchasing power over the medium and long term. Family ROS and ROD bonds use a similar inflation-linked formula with even higher margins for eligible holders.

How do I buy Polish treasury bonds?

Retail bonds can be bought online through the official State Treasury bonds service or at PKO BP and Pekao branches, with a minimum nominal value of 100 PLN per bond. You do not need a brokerage account for retail series; wholesale bonds listed on Catalyst require a regular brokerage account.

Can I avoid the 19% capital gains tax on bond interest?

Yes, if you hold the bonds inside an IKE account, capital gains tax (Belka tax) is deferred and ultimately waived if you meet the IKE withdrawal conditions. Outside IKE, the 19% flat tax on coupon income applies and is usually withheld at source.