Inflation-linked baby bond rate rises to 8.1%

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The rate on baby bonds - a high-yield government security available to newborn Hungarians since 2006 - has risen to 8.1%, Finance Minister Mihály Varga said in a post on Facebook on Thursday, according to a report by state news wire MTI.

The bonds pay a 3% premium over the annual rate of inflation which came in at 5.1% last year.

New parents who open a baby bond account for their child get a HUF 42,500 start-of-life subsidy and may buy more of the securities as their child grows older. The government offers a 10% top-up for additional purchases, up to HUF 12,000 a year - a threshold that was doubled from the start of 2022.

Varga noted that parents have opened baby bond accounts for 273,000 children, so far. Savings on these accounts add up to more than HUF 153 bln, he added.

Last year, baby bond subscriptions rose by one-third, Varga said.

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