Russians bought bonds for a record amount: an attempt to save money

Experts compared the profitability, pros and cons of different types of savings

An increase in the influx of funds from retail investors into bonds was recorded on the Moscow Exchange. In September, citizens increased their investments in this instrument by 25%. As a result, it reached a record amount for the domestic market of 273 billion rubles. At the same time, due to the constant increase in the key rate of the Central Bank of the Russian Federation, deposits in banks have noticeably increased in profitability. The regulator makes it clear that this trend will continue in the future. MK discussed with experts where it is more profitable to invest and what risks citizens face when buying bonds.

Financiers associate the increase in bond purchases by compatriots to a record level with an increase in their profitability, which occurred against the background of a rise in rates in the economy, caused in turn by an increase in the key rate of the Central Bank. Thus, the average yield of corporate bonds by October 10 is 13.5%. Federal loan bonds (OFZ) guarantee a profit of 11.8%–12.8%. But the maximum yield on ruble savings in banks by the end of September, according to the Central Bank of the Russian Federation, was 10.2%. True, this is still almost twice as high as official inflation, which by October 2 amounted to 5.9%.

According to the Moscow Exchange, 85% of Russians’ investments come from investments in corporate bonds, whose average yield of 13.5% per annum in September of this year significantly exceeded the profit from bank deposits, because many banks began to raise deposit rates only in October.

According to Freedom Finance Global analyst Vladimir Chernov, purchasing bonds can protect against inflation, since their average yield is 12.5% ​​per annum for OFZs and 13.5% per annum for corporate bonds, which is higher than the inflation forecast by the Central Bank of the Russian Federation for 2023 6–7%. They can also become an alternative to storing savings in foreign currency or gold. However, it is incorrect to compare these assets in principle, since the yield of bonds is fixed (with the exception of OFZ-PK and OFZ-IN), therefore this asset is considered risk-free, and you can lose funds when investing in them only in the event of bankruptcy of the issuer that issued these securities (that is bankruptcy of the state, its region or the issuing company in the case of corporate securities). The returns on investments in gold or currency are unknown in advance and over a period of time they may even become negative, so these assets are considered risky.

We can expect a further increase in citizens’ interest in investing their savings in OFZs against the backdrop of several factors. Firstly, most likely their yields will continue to grow against the background of further tightening of the monetary policy of the Russian Central Bank, since the deputy chairman of the Bank of Russia on Tuesday and Wednesday gave a clear signal that the regulator will continue to raise the key rate. Secondly, the number of private investors on the Moscow Exchange is constantly growing. The population is becoming financially literate and showing greater interest in investing, which means that the growth of investments in risk-free fixed income securities will continue to increase. Thirdly, the geopolitical and economic situation in Russia still remains quite tense, so citizens are more likely to use investments in such assets to save their money, the analyst is sure.

“The key rate has increased sharply over the past four months, now it has reached 13% and this is not the limit,” Alexander Razuvaev, a member of the supervisory board of the Guild of Financial Analysts and Risk Managers, continues the topic. — Accordingly, bonds have become more attractive for Russians. In addition, the stock market has performed well since the beginning of the year. It makes sense to take profits and transfer to bonds. I think that at the next meeting of the board of directors of the Central Bank of the Russian Federation the key rate will be increased to 14%. But the cycle of increasing this indicator is ending. I think the rate will reach 15% and stop growing.”

If we talk about an effective strategy for saving money, then, according to the expert, the best recommendation now is to open a bank deposit for 3 months, and in January take a profit and transfer the money to a new deposit with the maximum possible term. Firstly, in January, banks will attract funds from the population through New Year and Christmas programs and various promotions, which makes investments during this period as profitable as possible. Secondly, by this time the Bank of Russia will raise the key rate high enough for financial and credit organizations to offer interest on deposits at a level significantly higher than official inflation.

“I don’t think that bank deposits are worse than bonds,” notes Razuvaev. “Investing in bonds also has its downsides.” Thus, default on bonds is common, and deposits in the amount of up to 1.4 million rubles are insured by the state. Savings in the largest banks in Russia are no less reliable than OFZ. Remember also the story with the beginning of the SVO: there were stop trades, including on bonds, even on OFZ, and it was always possible to withdraw money from a bank account. In addition, the deposit can be closed at any time, and if you suddenly need funds and want to sell bonds, then at what price you end up doing this will depend on many factors. “I believe that in the current situation, a deposit is the best conservative investment, at least it is more reliable than shares,” the expert emphasized.