Government bonds are bonds issued by a national government, bound to pay
announced fixed periodic profit payments and to repay the face value on
the maturity date. Many government bonds provide facility of combined
interest so non collection of periodic profit enhance profit collected
at the time of maturity. Government bonds are usually denominated in the
country’s own currency. Bonds issued by national governments in foreign
currencies are normally referred to as sovereign bonds, although the
term “sovereign bond” may also refer to bonds issued in a country’s own
currency if these bonds are specifically intended for international
market.
International credit rating agencies will provide ratings for these
government bonds issued by various countries depending upon country’s
economic stability and international reputation.
Although government bonds, called saving certificates in Pakistan, do
not provide high return on investment but these bonds are considered
safest and securest form of investment, being guaranteed by government
(Although government corruption cannot ignored but on my few inquiries
government employees firmly assured me that not a single person lost
their money in this investment). Due to such assurances, I invested all
my money in government national saving certificates and prize bonds. So,
I consider myself among the most patriotic national partners.
Government bonds return is almost negligible when compared with property
investment returns.
During my analysis, I observed that real estate
provided incredible 200 times return during last 25 years in Pakistan.
My aunty took one flat in only Rs. 5,000 rupees in one LDA scheme in
Lahore and now its’ price is Rs. 10, 00,000. It is incredible 200 times
increase. Property investment turned people billionaires in Pakistan.
Same is the case in other good schemes like DHA, WAPDA Town etc.
Why such an unbelievable increase took place given Pakistan is a country
with little earning potential, low social security, high crimes and
corruption rate and added continuous terrorism and fundamentalism. It is
due to alarming growth of population so phenomenal increase in demand
and prices.
More Details: Government Savings bond, Savings bonds
