What is a Treasury Bond?
Treasury bond is a medium and long term debt instrument issued by the Government of Sri Lanka.
What are the Main Features of Treasury Bonds?
• Risk free, gilt edged debt instrument
• Maturities are available with 2-20 years
• It carries half yearly coupon payments and the principal is repaid on maturity
• Yield rates are determined by the market
• Tradable instrument in the secondary market
• Issued in scripless form
What Benefits can be derived by Investing in Treasury Bonds?
- It is an absolutely risk free investment, since it is issued by the sovereign government. Hence, they are called gilt-edged securities meaning that they are covered by gold.
- You can get the highest rate of interest since the yield rates are determined by the market.
- Since these bonds are tradable in the secondary market, you can obtain instant liquidity by selling them in the market.
- All receipts of interest and maturity proceeds are fully repatriable.
- You could also have a joint investment with some other eligible person or persons. Hence, it is a very good way to share your investments with loved persons.
- You are not subject to further taxation, since a withholding tax of 10 percent is already charged at source.
- No stamp duty is payable on these bonds.
- Transactions relating to your investment will be done through a state of the art, Scripless Security Settlement System and the fully automated Central Depository System (CDS).
Who can invest in Treasury Bonds?
(a) Sri Lankans who have made their permanent residence overseas (Non-residents);
(b) Citizens of Sri Lanka who have taken up overseas employment / set up business in abroad;
(c) Citizens of Sri Lanka with dual citizenship in Sri Lanka and in another country;
(d) Sri Lankan professionals living in Sri Lanka or abroad who earn income in foreign currency;
(e) Banks acting in fiduciary capacity on behalf of the above categories.
What Types of Treasury Bonds Foreign Investors Can Purchase?
Eligible investors can purchase, sell or transfer Treasury bonds with any maturity period.
How Can I Purchase Treasury Bonds?
You can purchase Treasury bonds at any time through Commercial Bank by opening a special LKR account named TIERA-D (Treasury Bond Investment External Rupee Account-Deshabhimani)
What is the Minimum Investment Amount ? ( for Sri Lankan Diaspora and Migrants )
Individuals -USD 10,000/- (or equivalent)
Others - USD 100,000/-(or equivalent)
How Can I Collect Interest and Maturity Proceeds?
Interest will be credited to your TIERA-D account semi-annually
Maturity proceeds will be credited to your TIERA-D account immediately after maturity.
How do I Get Information on Treasury Bonds?
For any clarifications, please contact:
Mr Sanath Wijesuriya, Mr Hemal Jayasekara, or Mr Suresh Pinto at the Fixed Income Securities desk, Global Markets, Commercial Bank of Ceylon PLC.
Telephone - 94-11-2332319, 94-11-2421831
Email - treasury@combank.net
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