Of course, regional bonds is one of the investments more original for which you can opt to make the savings profitable. In particular, due to the very characteristics of this very special financial market. It is based on bonds, but with a very definite peculiarity. It is not other than it is from the different autonomous communities of the Kingdom of Spain. You have many modalities to choose from, although all of them are governed by the same hiring parameters. In this way, you can subscribe bonds of Castilla y León, Catalonia, Murcia or any other territory of the Spanish geography.
Although the official name of these financial products is that of regional bonds, a large part of investors are familiar with them as patriotic. They have had a certain controversy due to the special characteristics they present. To the point that they are not highly recommended by financial agents. Seeing them as a product that is very close to toxic substances and that can create more than one problem for its applicants. Either way, it is one more alternative that you have in the investment world.
Autonomous or patriotic bonds are characterized because they are not prolific in their broadcast. Because in effect, they are not available at any time, nor in all years. They depend in a certain way on the financing needs that the different autonomous communities may have. Something that does not happen at all times. Due to this, it is a very irregular product in terms of its presence in the financial markets so that you can subscribe them based on their contracting conditions.
Regional bonds: issuers
This class of products from fixed income are issued by part of the historical territories of Spain. Catalonia, the Valencian Community, Madrid, Galicia, Asturias or the Balearic Islands are some of the communities in charge of marketing these original investment models. But with differences in terms of performance, maturities and even minimum amounts. No bond presents the same conditions. Do not forget it from now on if your intention is to opt for this investment in fixed income. Not surprisingly, it is one of the main novelties that it presents in its current offer.
From this scenario, you can find short, medium and long-term regional bonds. Although in different autonomous communities. You should also bear in mind that you will have no choice but to wait for the emissions to take place. It may take a long time for this to occur. Patriotic bonds are not a uniform financial product. Rather, it is adapted to the needs of each autonomous community. Not all of them will be the same as you will see from now on.
Yields of these bonds
The first question that you will ask yourself is the profitability that you can achieve on your savings. Well, it will depend on each issue and the community that takes them to the financial markets. In any case, so that you have an approximate idea of its return, you must know that it oscillates between 1% and 6%. Within these wide margins you can find different bond models.
You can hire them through your usual bank. But also through certain financial agents that market these products intended for investment. In any case, they do not entail commissions or other expenses in their management or maintenance. From this scenario, it is a very affordable format for all households. Since it does not entail additional expenses, as on the other hand it happens with a good part of banking products. With what you can save money if you choose this strategy in your investment.
You will not even have to pay any expenses for the intermediation of financial entities. From this point of view it is about an investment model that is very easy to understand. To the point that it does not require a broad financial culture on your part. As on the other hand, it happens with products as specific as warrants, credit sales or derivatives. Or even if you compare them with traditional investment funds. From this scenario you will not get any negative surprises.
Your terms of stay
Another aspect that you should know is the term to which your savings are directed. Well, they are also very flexible, depending on your personal needs. The minimum term passes by having the savings immobilized for 12 or 15 months. With a maximum period that is established around five. And where as the term is denser, the higher profitability you will achieve. Although with certain nuances that you will know from now on.
During your period of stay you will not be able to carry out rescues, neither partial nor total. But you will have to wait for its expiration to recover your monetary contributions plus the consequent benefits. That is why you should only invest that money that you will not need for a long time. Not surprisingly, you should know that regional bonds are listed on secondary markets. Much more complex in terms of its mechanisms. Which can lead you to create more than one problem during the investment.
They carry greater risk
But if the regional or patriotic bonds are characterized by something, it is because of the great risk that their operations entail. Because in effect, if the community that issues them has a financing problem, you can lose your savings. This is why they offer a more generous performance. Up to 5% levels. Much broader than most fixed income products provide you. Among them, time deposits, bank promissory notes, high-income accounts, or state and corporate bonds. In these cases, with yields that rarely exceed the 2% barrier.
In this way, you have a higher return on savings, but assuming the risks that you incur with the contracting of these very particular bonds. To have greater security in this investment, it will be very necessary for you to inform yourself about the accounts presented by the autonomous community in charge of issuing these bonds. So that in this way, you are in a position to limit the risks with more information. Not in vain, territories with major budget mismatches they are what generate the highest performance. It is the toll that you have to pay for these conditions.
Affordable for everyone
One of their main advantages is that they are very affordable for all savers. Since 1.000 € you can formalize this financial product. No limitations regarding the maximum amounts. Unlike other investment models that require larger contributions to open positions. In some cases, low amounts are really very high. In addition, they do not involve additional expenses or commissions that make investments more expensive. This is one of its most valued features. Above all the rest.
However, and as on the other hand it is logical, as the contributions are higher, more money will go to the balance of your checking account. It also does not carry no kind of brokerage by the intermediaries of the main financiers. Valid for all autonomous communities. With small differences in terms of their contributions. Practically invaluable as you can see through the current offer of regional bonds.
In any case, you will not always have them available as you may wish. To the point that at the moment only the current offerings are present bonds of the Community of Madrid. With a yield of just over 2%. As a consequence, its risk is lower due to the greater reliability of this autonomous community. Although it is not ruled out that in the coming months other local entities may launch new issues.
Disadvantages in hiring
You must take into account what are the problems that you can generate with the formalization of these bonds. The first, that you can lose the investment due to the lack of funding from the issuing community. Next the fact that it is a certainly irregular investment due to the little regularity of their emissions. From this point of view, you have much safer investments with guarantees to protect the savings deposited in the bonds.
It is also of special relevance that they are investments that are not really endorsed by the rating agencies. In fact, they have one of the lowest notes. From this perspective, it is not a model that is highly recommended for any investor profile.. From the most conservative to the most aggressive. Specifically, it is one of the most dangerous financial products for your interests. Even 'above some coming from equities.
In the end, it will be up to you to decide if it is really worth opting for this particular investment. Even ahead of other series of products also with a lot of risk in their hiring. In any case, it will be in any case an alternative that you have to make profitable the savings from your checking account. It is one of the options to exceed the margins that financial products currently offer you. Where they don't usually exceed levels above 2%. In part, as a consequence of the lowering of the price of money by the community monetary authorities. Up to 0%.