When people think of investing, they often think of stocks and bonds. Most people have some familiarity with the stock market. However, they may not have as much knowledge about bonds.
Bonds are a type of loan that investors give to the government to finance governmental operations. In return, the government pays interest on these bonds. Experts refer to this interest as coupon payments.
Many governments throughout the world use bonds, including Israel. So, you may wonder, what are Israel bonds like? What are Israel bonds used for?
If you’ve wondered about whether to buy Israel bonds, check out our guide below! We’ll answer these two questions and many more about Israel bonds. Let’s get started!
What Are Israel Bonds Used For?
Israel uses bonds like most other governments. Namely, Israel uses this money to bolster its economy. The country has used bonds since 1951.
Ben-Gurion, the first prime minister of Israel, first presented issuing Israel bonds to help support the new country. In the following spring, Israel released its first of what would be many bond offerings.
These bonds proved to be a success. In six years, bonds made up 35% of Israel’s special development budget.
Understand that there are several denominations of bonds in Israel. These denominations have varying maturities that meet the different needs of investors.
Israel Bond Rates and Denominations
There are several types of Israel bond denominations available. Each of these has different goals and minimum purchase amounts.
In this section, we’ll outline a few of the bonds available. Let’s start with Jubilee bonds.
Jubilee bonds have a minimum purchase amount of $25,000. The government issues these bonds in increments of $5,000.
You can find these bonds in maturities of 2,3, 5, 10, and 15 years. The higher your maturity, the higher the bond coupon rate. The government pays interest on your bonds semi-annually.
Named for the Maccabean revolutionaries who founded the Hasmonean Dynasty, these bonds have a minimum purchase amount of $5,000. The government issues these bonds in increments of $1,000. Maccabee bonds come in the same maturities as Jubilee bonds.
Sabra bonds come in two maturity ages. These are one year and three years.
The government issues one-year-maturity bonds at a minimum purchase amount of $5,000 with increments of $500. In contrast, three-year-maturity bonds come with a minimal subscription of $1,000 and increments of $100.
Mazel Tov Bonds
Mazel Tov bonds come at a minimum purchase amount of $100. They come in increments of $10.
These bonds fall under the zero-coupon classification. To learn more about these, you can learn more about at thejerusalemportfolio.com.
e-Mitzvah and Floating-Rate LIBOR Financing Bonds
e-Mitzvah bonds have a minimum purchase amount of $36 and increments of $18. These are also zero-coupon bonds, which mature in 5 years.
In contrast, Floating-Rate LIBOR Financing bonds mature in 2 years, having a minimum denomination of $100,000. The government issues increments of $25,000 for these bonds.
Consider Buying Israel Bonds Today
Israel bonds can be an excellent investment. Some types of bonds offer significant coupon payments that can benefit you. So, consider whether these bonds are a worthwhile financial option for you!
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