Btp Valore 2024 underway: new issue. Who is it suitable for and why

Here we are: the third placement of Btp Valore has started, the government bond designed for families and small savers. They can be purchased from today (Monday 26 February) to Friday 1 March, unless closed early. It is suitable for those who have liquidity to invest, do not want risks, but are looking for a flow of coupons instead of leaving savings in the current account. And it is convenient for those who want to diversify their portfolio, offsetting risky investments with government bonds.

This is the third placement and the last two have been successful. In 2023 the MEF carried out two issues (in June and October) for a total amount of 35 billion. Today the BTP Valore 2024 arrives on the market: duration of 6 years, coupons paid every three months, minimum investment of one thousand euros, minimum guaranteed rates of 3.25% for the first three years then 4% and final premium of 0.7% (if you hold the titles until 2030).

The intent is to provide families with liquidity support to at least partially compensate for the erosion of purchasing power caused by inflation in recent years: a cash flow for workers and pensioners.

It is the ideal choice for those who think they do not need the invested sum and therefore park it for six years instead of in the current account in a “place” that has a good guaranteed return. However, without thinking of being able to go on a cruise for weeks with these earnings, as the commercial in circulation suggests. By investing 1000 euros today, in six years there will be 224.5 euros accrued, by investing 3 thousand in 2030 the coupons will have guaranteed 673.5 euros.

Savers also wonder how much interest rates will impact today's investing. You will have a loss if there are further increases and you decide to sell before the six-year period expires. If, on the contrary, rates fall, then there will be a capital gain. But if those who buy the BTP Valore 2024 today do not sell before 2030, they will not be subject to rate fluctuations. But there is one aspect to take into consideration. The title has a “step-up” mechanism, so the rate is the same for the first three years and then increases from the fourth to the sixth year. This is especially interesting today, in view and forecast of a reduction in interest rates. Because if this is the case, today you are buying a yield that will be more difficult to find on the bond market in the future, when rates fall.

The product is also suitable for families and small savers who already have a portfolio and who are looking for a safe product to complement those with a return risk. It's like having a small certain “buffer”, as long as you hold the security until maturity. Selling it first means losing the final bonus and taking on the risk of the market value at that moment.

Finally, looking from the side of the State, the BTP Valore 2024 (like those of 2023) is politically convenient because it means decoupling part of the Italian debt from the international market, subject to fluctuations and speculative maneuvers. And it means consolidating the share of debt in the hands of small savers, who have stable financial behaviour. In short, it is better to borrow money from Italian savers than from foreign investors.