How to invest in Treasury bonds — safe alternative to deposits

What are Treasury bonds?

Treasury bonds are securities issued by the Treasury. By buying a bond, you lend money to the government, which in return pays you interest for a specified period and returns the capital at the end.

Main advantages:

• 100% safety — guaranteed by Polish Treasury
• Higher interest rates than deposits (usually 1-3 p.p. more)
• No capital gains tax — income exempt from 19% tax
• Flexibility — can be redeemed before maturity

Types of Treasury bonds available in 2026

1. Fixed-rate bonds

OTS (Three-month Treasury Bonds)

• Period: 3 months
• Interest rate: 5.75% annually (February 2026)
• For whom: Short-term surplus placement
• Capitalization: At period end

TOZ (Three-month Zero-coupon Bonds)

• Period: 3 months
• Mechanism: You buy cheaper, get full value
• Example: Buy for 985 PLN, get 1000 PLN after 3 months
• Effective interest rate: ~6.1% annually

2. Inflation-indexed bonds

COI (Four-year Indexed Bonds)

• Period: 4 years
• Interest rate: 1.5% + inflation
• Protection: Full inflation protection
• Capitalization: Annual

EDO (Retirement Long-term Bonds)

• Period: 6 years
• Interest rate: 1.75% + inflation
• Purpose: Retirement saving
• Limit: 9,000 PLN annually per person

3. Variable-rate bonds

ROR (Family Annual Bonds)

• Period: 12 months
• Interest rate: 6.5% (February 2026)
• For whom: Families with children (increased limits)
• Capitalization: Monthly

Bond interest rates — current rates (February 2026)

Rates current as of 28.02.2026 — check current ones on gov.pl

How to buy Treasury bonds — step by step

Method 1: Online (most popular)

Step 1: Go to gov.pl → Treasury bonds

Step 2: Log in through:

• Trusted Profile
• mObywatel
• Bank (ePUAP)

Step 3: Choose bond type and amount

Step 4: Confirm transaction

Step 5: Pay through:

• Bank transfer (0-24h)
• BLIK (immediately)
• Payment card

Method 2: At bank (traditional)

Banks selling bonds:

• PKO BP
• Bank Pekao SA
• mBank
• ING Bank Śląski
• Santander Bank Polska

Required documents:

• ID card
• PESEL number
• Bank account number

Method 3: At post office

Available at:

• Post offices with financial services
• Post-bank points
• Selected Polish Post outlets

Treasury bond taxation

Domestic bonds — TAX EXEMPT

Exempt from 19% capital gains tax:

• All bonds issued by Polish Treasury
• Municipal bonds of Polish local governments
• Treasury bills

You don't need to:

• Pay tax on interest
• Report in tax return (PIT)
• Keep additional accounting

Foreign bonds — TAXED

19% capital gains tax on:

• Corporate bonds
• Foreign government bonds
• Bond ETFs

Bond investment strategies

Strategy 1: Bond ladder

Principle: You buy bonds with different maturity dates

Example with 50,000 PLN:

• 10,000 PLN — OTS (3 months)
• 15,000 PLN — ROR (12 months)
• 25,000 PLN — COI (4 years)

Effect:

• Regular income from redemptions
• Reinvestment at current rates
• Protection against interest rate risk

Strategy 2: Barbell

Principle: Part of money in short, part in long bonds

Example:

• 60% — OTS and TOZ (liquidity)
• 40% — COI and EDO (higher profitability)

Strategy 3: All-in long-term

For whom: Investors focused on long period

Recommendation:

• 80% COI (inflation protection)
• 20% EDO (additional premium for length)

Bonds vs other investments — comparison

Bonds vs Bank deposits

Bonds vs Stocks/ETFs

When to choose Treasury bonds?

Bonds ARE a good choice when:

1. You need safety

• Savings for apartment (1-2 years)
• Emergency fund
• Retirement capital (near future)

2. Interest rates are high

• NBP raises rates (2022-2025)
• Real rates positive (above inflation)
• Yield gap vs bank deposits > 1 p.p.

3. You have short investment horizon

• Up to 2 years — better than stocks
• 2-5 years — comparable to stocks with less risk

Bonds are BAD choice when:

1. Long-term horizon (10+ years)

• Stocks/ETFs historically give higher returns
• Inflation long-term "eats" fixed interest

2. Interest rates falling

• Fixed-rate bonds lose attractiveness
• Better to wait for higher rates

3. Very high inflation

• Even COI may not keep up with sudden price jumps
• Real rates negative

Treasury bond limits

Annual limits (2026):

*For families with children — 100k PLN base + 50k PLN per child

Common bond mistakes

1. Buying only short-term

Problem: Missing higher rates when NBP cuts Solution: Maturity diversification (ladder)

2. Ignoring inflation

Problem: Fixed interest vs rising prices Solution: Mix COI + fixed-rate bonds

3. Early redemption without need

Problem: Loss of part of interest (penalty interest) Solution: Cash flow planning

4. Exceeding limits

Problem: Excess returns to account, no interest
Solution: Monitoring limits in app

Bonds in investment strategy

For young (20-35 years)

Allocation: 10-20% of portfolio Types: OTS, ROR (liquidity) Goal: Emergency fund

For middle-aged (35-50 years)

Allocation: 20-40% of portfolio Types: COI, EDO (inflation protection) Goal: Portfolio stabilization

For older (50+ years)

Allocation: 40-70% of portfolio Types: Mix of all types Goal: Capital safety

Summary

Treasury bonds are an excellent instrument for:

• Safe storage of financial surpluses
• Inflation protection (COI, EDO)
• Supplementing equity-ETF portfolio

Key advantages: ✅ No risk of capital loss ✅ Exemption from capital gains tax
✅ Interest rates higher than deposits ✅ Possibility of early redemption

Monitor your bonds along with other investments in the Freenance app — all assets in one place, clear summaries and forecasts.