Possibility of early redemption. Here is the novelty of the BTP Più, the title of state for the retail audience from today on the market, with a sprint start. After just over an hour from the start of the placement, the requests had already exceeded billion euros. And the big difference, compared to the previous offers, is that it can be sold at the set price (100) after four years, therefore before the natural deadline. But is it really better?
The BTP plus is a title of state that lasts eight years. It is a form of medium-long term investment dedicated exclusively to small savers. It provides quarterly coupons, with a structure of growing coupons over time (step-up): for the first four years the minimum return is 2.80%, while for the last four years it rises to 3.60%. The final rate could be revised upwards at the end of the placement period. At the end of the fourth year (between January 29 and February 16, 2029) the early reimbursement of the entire capital invested or a part can be requested. The most BTP, like all government bonds, enjoys a subsidized taxation at 12.5%, is free from succession taxes and, from this year, it is excluded from the ISEE calculation of up to 50 thousand euros.
It can be bought from February 17 via the bank, post office or home banking platforms with online trading function. The minimum investment cut is a thousand euros. There are no maximum limits of purchases. The placement will close on Friday 21 February at 1pm, with the possibility of early closing.
In recent years, the treasure has issued different types of BTPs dedicated to private investors, each with specific and different characteristics. BTP Italia has for example coupons indexed to inflation, to protect purchasing power. BTP value offers growing coupons over time (step-up) and a loyalty bonus for those who keep it until expiry. BTP Futura combines the step-up with a variable component (linked to the growth of Italian GDP) to the final loyalty prize. The most BTP introduces the possibility of early reimbursement on par, which allows to reduce the risk of tinance in the event of an increase in interest rates. Lesson learned. In fact, the BTPFUTURA, issued between 2020 and 2021 in a period of low rates, were penalized by the subsequent rise in the rates by the ECB, with capital losses up to 23%.
For those who invest today, the more or a deposit account should be more convenient? According to an Easy.it analysis it depends on the time horizon. In the short term, the deposit accounts offer greater flexibility and potentially higher returns, while in the long run the title of state in issue from today could guarantee a higher profit. They look at the twelve months a deposit account not bound with gross return of 4% could guarantee a net profit of 276 euros on an investment of 10,000 euros, against the 266 euros of the BTP plus with an hypothesized rate of 3%. Looking at the four years the BTP most could be more convenient: with a rate of 3% gross annual, the net profit would reach 1,104 euros, while a deposit account bound at 3.70% would guarantee 1,015 euros. In addition, there is the advantage of the quarterly coupon, of the BTP plus, compared to the deposit accounts, where the interests are usually paid at the deadline.
