What are war bonds and how can you buy them from Ukraine?

 

Elizabeth Atkin

Soldiers are currently defending Kyiv and other Ukrainian cities from Russian attacks (Picture: Aytac Unal/Anadolu Agency via Getty Images)

War is expensive. Ukraine knows this all too well, as it continues defending itself from Russian attacks.

In order to help fund their continued resistance, Ukraine’s Ministry of Finance announced it would begin selling war bonds.

The Ministry said: ‘In the time of military aggression of the Russian Federation, the Ministry of Finance offers citizens, businesses and foreign investors to support the budget of Ukraine by investing in military government bonds.’

Bonds were put up for sale on March 1 – and have, at the time of writing, raised an impressive 8.1 billion hryvnia (£202.7 million) to fund the Ukrainian Armed Forces.

But what exactly are war bonds? And if you’re in the UK, can you purchase them to show your support?

What are war bonds?

In short: a war bond is a type of investment called a debt security.

Essentially, the government sells debt to the public – meaning the public lends the government money to fund the country’s military capabilities.

War bonds don’t make a huge return on investment for the buyer. It’s not likely the bond will pay out a yearly interest fee, or anything like that.

Investopedia says that the bonds are usually sold at less than their face value, so eventually the bond matures to its actual value – usually after a long period of time.

Because they’re not money-spinners for the bond holder, they’re typically billed as a way to show patriotism and support for the military.

Before they were issued by Ukraine in 2022, war bonds were sold in the US, UK, Canada, Germany and other countries during the First World War to fund their armies.

Interestingly, at the time the US renamed ‘defence bonds’ as ‘liberty bonds’ to rally support.

How to buy war bonds from Ukraine

Can you buy a bond to help Ukraine? (Picture: Taylor Weidman/Bloomberg)

It doesn’t seem that there’s an easy way for people based in the UK to buy the bonds.

You can’t just pop onto a website and purchase one (as far as we can tell). Ukraine’s war bonds were sold at auction – which took place yesterday on Tuesday, March 1.

In a Twitter thread posted on February 28, the Ukrainian Ministry of Finance explained how the bonds would work.

It wrote: ‘The main conditions of military government bonds are as follows. The nominal value of one bond is UAH 1,000 (£25), tenure is 1 year and the yield will be determined at auction.

‘The government bond auction will take place tomorrow. Contact your primary dealer for the details.’

However, even after the sale had finished, the ministry was inundated with Brits, Americans and internationals keen to purchase the bonds as individual investors.

Your best bet? Follow Ministry of Finance’s Twitter account (which tweets in English) for any news of any upcoming auctions.

If you regularly invest and buy bonds, speak to the broker you deal with to find out more.

And if you’re keen to part with your money ASAP, consider donating to vital charities in Ukraine, which provide military support, humanitarian aid and independent journalism.