New Webkincstár and Mobilkincstár launched, high-yield bonds unavailable for purchase

Published: December 11 2023

The new Webkincstár and Mobilkincstár platforms have been launched by the Magyar Államkincstár, providing a quick and easy way to open an investment account. However, the system does not allow the purchase of high-yield bonds that were recently advertised by banks.

The new Webkincstár and Mobilkincstár platforms offer a more attractive and user-friendly interface compared to the previous versions. However, there are some peculiarities, such as using an account with over 48 million forints as an example on the homepage, which is not representative of the average Hungarian customer. Additionally, users of the Mobilkincstár platform will need to re-enter their customer code and reactivate the biometric identification feature.

One frustrating aspect of the new platforms is that they offer the option to purchase various state bonds under the "new bonds" menu, but the system does not allow their purchase. This includes bonds such as the 2026/J Premium Hungarian Government Bond with a starting yield of 15.25% or two types of Bonus Hungarian Government Bonds with yields above 17%. Except for a few variable rate bonds tied to BUBOR, customers will have to settle for government bonds with yields below 10%. It is expected that even the current 10-11% interest rate on bonds will soon decrease as interbank rates continue to decline.

The current state bonds do not offer the same high yields as those mentioned in the educational information sent out by banks in November and December. The banks highlighted the potential yield of investments made in October of the previous year. While the letter described the dream yields that could have been earned, the reality is that customers can now only access lower yielding government bonds.

While the current yields on government bonds are still more favorable than most bank deposit offers, some banks still provide higher interest rates, with bonuses tied to the base rate. However, it is important to consider that deposit interest rates, unlike government bonds, are subject to income tax and social security contributions.

=== What are Webkincstár and Mobilkincstár? Webkincstár and Mobilkincstár are new services launched by the Hungarian State Treasury (Magyar Államkincstár). They provide a quick and easy way to open a securities account and manage investments online.

What is the purpose of the Webkincstár and Mobilkincstár services? The services allow users to open and manage securities accounts online, providing a convenient way to invest in government securities offered by the Hungarian State Treasury.

What is the benefit of the new online securities account opening process? The new online process for opening securities accounts is faster and more streamlined compared to the previous method. It eliminates the lengthy waiting time and provides timely information to users regarding the progress of their application.

Who can participate in the Webkincstár and Mobilkincstár services? Any individual, both Hungarian citizens and foreign nationals, who meet the eligibility requirements can participate. Long-term residents of Hungary who have been living in the country for at least 3 months as of October 1, 2022, are eligible to use the services.

What features have been improved in the new Webkincstár and Mobilkincstár? The new Webkincstár and Mobilkincstár platforms offer a more visually appealing and user-friendly interface compared to the previous version. However, there are still some peculiarities and improvements needed in the system.

What are the limitations of the new Webkincstár and Mobilkincstár services? Although the services offer a variety of government securities for investment, there are some high-yield bonds that are currently unavailable for purchase through the system. Users can only invest in government securities with yields below 10%, except for a few variable-rate bonds tied to the BUBOR.

How does the Mobilkincstár service work? To use the Mobilkincstár service, users need to provide their customer code and reactivate biometric identification. It is an updated version of the previously available mobile platform for managing securities accounts.

Why are the advertised high-yield government securities not available for purchase? The system currently does not allow the purchase of high-yield government securities that were recently communicated to bank customers. These securities, such as the 2026/J Premium Hungarian Government Bond with a starting yield of 15.25% or various Bonus Hungarian Government Bonds with yields above 17%, are not accessible through the system.

Are the current government bond yields as attractive as the ones mentioned in recent bank communications? No, the current government bond yields are lower than those mentioned in recent bank communications. The high yields advertised by banks in their educational materials are not currently achievable for small investors, except for a few variable-rate bonds.

What other investment options are available in Hungary? Apart from government securities, there are also fixed-term deposits offered by banks that may provide higher interest rates, depending on the bank and current market conditions. However, it is important to consider that these deposits may be subject to tax and social security contributions.

What is the expectation for future interest rates on government bonds? It is expected that interest rates on government bonds, including those currently offering 10-11% interest, will decrease in the future as the interbank rates continue to decline. The exact timing and extent of the rate decrease may vary.

Is there a census in Hungary? How often does it take place? Yes, there is a census in Hungary. The census takes place every ten years, with the last one occurring in 2021. The next census is scheduled for 2022.