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If you're looking to grow your money (and who isn't), one strategy you should consider is Government securities. Government securities have been popular with businesses and individuals alike for decades, and for good reason: they are among the most lucrative investments you'll find in Barbados. Here's a guide to three Government securities that explains how they work and to help you determine which one might be right for you.
Minimum Investment: $1,000 nominal value (thereafter multiples of $1,000).
Treasury bills, or T-Bills, are short-term securities – you can opt for either a 91-day or 182-day maturity. They're sold at a discount, which in simple terms means that you invest with a specific end value (the nominal value) in mind but pay less than that. The difference between the two is the return on your investment. For example, if you wanted to end up with $1,000, then you might pay $995 up front and then you’d earn $5 over the lifespan of the investment.
Historically, would-be investors submitted a bid indicating how much they were willing to pay per $1,000 nominal value and the Government determined which offers it would accept. While that might work well for corporations with investment teams, it can be a bit complicated for individual investors. Therefore, in 2024, Government introduced a non-competitive window, an option that allows individuals to apply to purchase treasury bills without having to bid. If you exercise this option (you still have the option to bid if you wish) you receive the average rate of return for that issue.
Due to their very short maturity period, treasury bills pay a lower rate of return than other Government securities. However, if you’re someone who might need to access your funds in the near future, but still want to earn money on them – more than you’d earn in a standard savings account – then investing in treasury bills is something you should consider.
Find out when treasury bills will be available.
Minimum Investment: $500 (thereafter in increments of $100).
BOSS+ bonds are a five-year investment that pays 4.5 percent interest per year. That means that if you invested $1,000, you'd earn $45 per year, or a total of $225 over the lifespan of your investment. You receive interest payments in two instalments each year, and that interest is not subject to withholding tax, which means you get the entire amount. When your investment matures, you get back your initial investment (or principal).
Watch this video to see how BOSS+ compares to similar investments.
While BOSS+ takes five years to reach maturity, you have the option to cash in your bonds after just 24 months. If you do, you’ll get back your initial investment and get to keep all of the interest that money earned up until that point. Of course, you won’t receive any further interest payments.
Another possibility if you don't want to hold the bonds until they mature is to sell them through a broker or directly to someone else. You can do that at any time. However, in this scenario, you and the buyer would have to negotiate the price.
Find out everything you need to know about BOSS+.
If you're looking for a medium-term investment that gives you a predictable income stream with an attractive interest rate, or if you like the idea of having some flexibility built into your investment, BOSS+ might be the right option for you.
There's also another group of people this might be the perfect investment for: people who have refunded pension plan contributions to invest, such as if you’ve left a job and gotten back the money you invested in the company’s pension plan, or if you recently retired and got a lump sum from your pension. In both those situations, you’d generally have to pay 25 percent withholding tax on that money. However, if you reinvest it in Government securities for five years, you don't have to pay it, making BOSS+ a perfect maturity match. It’s important to note, however, that if you invest in BOSS+ for this purpose, you aren't allowed to exercise the early-redemption option.
Minimum Investment: $1,000 (thereafter multiples of $1,000).
Like BOSS+, treasury notes (T-Notes) and debentures are fixed-income securities that are sold at par – you pay the face value and then receive interest on that amount. Unlike BOSS+, however, the maturity period varies from issue to issue. A treasury note can have a maturity period between one and 10 years, while a debenture's maturity period is above 10 years. That's the only difference between the two.
The interest rate investors earn also varies from issue to issue and is generally higher the longer the maturity period. That means that debentures tend to offer a higher return on investment than treasury notes or other Government securities. You receive interest payments multiple times per year, usually semi-annually or quarterly depending on the specific issue, and that interest is subject to 15 percent withholding tax unless the investor is a pensioner, in which case their earnings are tax exempt.
It depends. Treasury notes with shorter maturities are a good option if you're looking for a short- to medium-term investment that offers competitive interest rates. Treasury notes with longer maturities and debentures are a lucrative option if you're thinking long term, such as if you’re investing for retirement.
Learn more about treasury notes and debentures and get information on current issues.
Treasury Bills | BOSS+ | Treasury Notes & Debentures | |
| Minimum investment | $1,000 | $500 | $1,000 |
| Maturity period | 91 days or 182 days | 5 years (with the option to cash in after 24 months) | T-Notes: 1-10 years Debentures: 10+ years |
| Interest rate/return on investment | Varies by issue/bid | 4.5% per annum | Varies by issue |
| Withholding Tax | None | None | 12.5% (except for pensioners) |
So, if you’re interested in an investment option that can help you achieve your financial goals, whatever they may be, Government securities could be just what you’re looking for. Whether it’s treasury bills, BOSS+ bonds, or treasury notes and debentures, they can all help you grow your money. And now you have the information to determine which one is right for you.