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government bonds

Also called: OVDP, treasury bonds

Bonds issued by a national government to borrow money; in Ukraine they are known as OVDP (domestic government bonds).

Government bonds are loans you make to a state. You pay the bond's price, the state pays you interest (the coupon) and returns the face value on a set date. In Ukraine they're called OVDP (ОВДП, domestic government loan bonds), including the "military bonds" sold during the war. They come in hryvnias, US dollars and euros, with a face value of 1,000 per bond.

They're among the safer places for money you'll need in a few years, especially in the currency you'll spend, because the risk is the state's ability to pay rather than one company's. They aren't risk-free: if you sell before maturity, the price can be below what you paid, and long bonds swing more when interest rates change. They also aren't deposits, so the Deposit Guarantee Fund doesn't cover them.

As of October 2026, for Ukrainian individuals, OVDP coupons and profits are free of personal income tax and military levy, while deposit interest is taxed at 18% plus 5%. Retail yields in September 2026 were roughly 15–17.75% a year on hryvnia bonds and 3–4% on dollar bonds. Rates change weekly and tax plans are under discussion, so check the current rules.

Example

For Zapas's Ukraine launch, Grace explains the safe part of a hryvnia goal: a user has 400,000 UAH saved towards 500,000 UAH needed in three years. At an illustrative 16% a year, a tax-free OVDP keeps the full 16%, while a deposit at the same 16% keeps 16% × (1 − 0.23) = 12.32% after tax. To match the bond, a taxed deposit would need about 16% ÷ 0.77 ≈ 20.8%.

She adds the price risk from the course's synthetic data: if rates rise by 2 points, a bond with a 2-year duration falls about 4%, and one with a 15-year duration about 30%. That's why the bond's term is matched to the date of the goal. Figures as of October 2026, for learning only; check the current rules and rates.

Common mistakes

  • Thinking a bond can't lose value: selling before maturity can bring less than you paid.
  • Comparing a bond's yield with a deposit rate without allowing for the 23% tax on deposit interest (as of October 2026).
  • Assuming the Deposit Guarantee Fund covers bonds; it doesn't.
  • Using long bonds for money you'll need in two or three years.

Learn it in the course