The first issue of defence bonds are placed on 10-28 October and redeemed on 29 October 2025. This new one-year issue will be subject to a 2 % annual interest rate.
“We considered the proposals made by the public and political parties and created a tool to support the defence funding. The defence bonds will be available for subscription by either individuals, business or other organisations. Since the beginning of the month, they have already been able to make voluntary contributions, and from today, they can lend to the State through acquisition of defence bonds. The resources of the Defence Fund will be dedicated for the needs of the Ministry of National Defence, in particular for various drones and anti-drones”, says Minister of Finance Gintarė Skaistė.
Defence bonds will be issued on the basis of Government Savings Notes (GBS). They will be offered through the same distributors selected by the Ministry of Finance, i.e. Swedbank and SEB. Natural and legal persons will be able to subscribe defence bonds in Swedbank or SEB online bank, as well as in SEB bank branches. More information on the acquisition of defence bonds can be found at www.gynybosfondas.lt and on the website of the Ministry of Finance.
The interest rate for defence bonds for each issue shall be set taking into account the average interest rate for borrowing by the Government on behalf of the State of an appropriate maturity, but in any case, it may not exceed 2 %, as decided by the Seimas on 20 June 2024.
“Defence bonds were created as an opportunity to contribute to the defence funding. For those who want to invest with a high return, there are numerous tools intended. Meanwhile, the distinctive feature of defence bonds is that the State would borrow from individuals and business cheaper than on the markets. In spring, during the debate, politicians expressed such a need, proposing a 2% interest rate”, says Minister of Finance G. Skaistė.
The interest rate will be determined and published together with other terms and conditions of the issue of defence bonds on the website of the Ministry of Finance at least one working day before the commencement of the placement of defence bonds. The preliminary schedule for the issue of defence bonds will be updated on a monthly basis and will also be published on the website of the Ministry of Finance.
When the time comes to redeem the defence bonds, nothing will have to be done - the money for the redeemed defence bonds and the interest due will be automatically transferred to the same account from which the payment for the purchased defence bonds was made.
We would like to note that the Defence Fund entered into operation on 1 October with the aim of increasing the national defence funding up to 3% of gross domestic product (GDP) in the long term, foreseeing additional sustainable sources of financing. Proceeds from taxes – diverted part of revenue from the corporate income, excise, municipal autonomous income to civil protection and extended Solidarity contribution for a year – will reach the Fund starting from 2025, while the opportunity to contribute to the Defence Fund for everyone started on 1 October by making a voluntary contribution (more information can be found on the Defence Fund’s website www.gynybosfondas.lt).
The resources of the Defence Fund will be dedicated for acquisition of weapons, equipment and ammunition necessary for the development of a division-level military unit capacity, infrastructure necessary for the German brigade in Lithuania, acquisition and development of counter-mobility measures, military mobility and double-purpose (civil and military needs) transport infrastructure projects, strengthening and development of the civil protection foreseen in the Law on Crisis Management and Civil Protection.
