What is the Belgian state bond

Belgium issues state bonds to raise money from its citizens to invest in the country. The bonds are a safe investment because the risk of the Belgian government going bankrupt is very low.

The latest issue came out on 4 September 2026. It has two options: a 1-year bond paying 2.75% gross, and a 10-year bond paying 3.70% gross. After the 30% withholding tax, that is 1.925% and 2.59% net.

Both figures come from the official brochure of the Belgian Debt Agency.

How does the state bond work

When you buy a state bond, you effectively lend money to the government. In return, the government pays you interest, also known as coupons. It pays out the interest every year. Each bond has a certain maturity. At the end of the maturity period, the government pays back the initial amount, also called the principal.

Take the 1-year bond issued on 4 September 2026, which pays 2.75%. Suppose you bought it for €100. On 4 September 2027, the government pays you back your €100 principal plus €2.75 in interest. After the 30% withholding tax, the €2.75 becomes €1.93, so you end up with €101.93.

How to buy a state bond

You can buy state bonds through the government website. This is the best option as you avoid any fees. The government issues bonds four times per year, and you can only subscribe during the subscription window.

The window for the September 2026 issue runs from 26 August to 3 September 2026 through a bank. It closes a day earlier, on 2 September, if you subscribe through the government website. Once it shuts, the only way in is to buy the bond on the secondary market from someone else.

You can also buy state bonds from your bank. But some banks charge fees. So people prefer buying directly through the government. Banks that charge fees include Axa, Belfius, BNP Paribas Fortis, Crelan, Deutsche Bank, ING, and vdk bank, among others.

The minimum to invest in a state bond is €100, which makes it a very accessible investment. But you must invest in multiples of €100.

How to sell your state bond

If you hold your bond until maturity, which is 1 year for a 1-year bond, you don't have to do anything. Upon maturity, the principal amount is automatically deposited into your account, restoring your initial investment. At the same time, you will also receive the net interest.

You can also choose to sell your bond at any time on the secondary market through a stock exchange. In that case, you'll need a brokerage account to get access. The price you will get may be more or less than what you paid for it, depending on market conditions. Bond prices are particularly sensitive to changes in interest rates. They increase when interest rates go down, and vice versa.

The taxes for a state bond

You have to pay a 30% withholding tax on the interest. So the 1-year bond of September 2026, with its 2.75% gross rate, yields 1.925% net. The 10-year bond yields 2.59% net on its 3.70% gross rate.

If you bought your state bonds through a bank, they sit in a securities account and count towards the €1 million threshold for the tax on securities accounts. The rate is 0.30% a year. That threshold applies per securities account rather than to your total wealth, so someone holding €1.5 million across two accounts of €750,000 each pays nothing.

Since 2026, state bonds also fall under the 10% capital gains tax. The interest keeps its own 30% withholding tax, and the 10% applies on top of that to any gain you make on the price of the bond itself. If you subscribe at issue and hold to maturity, you get back exactly the €100 you put in, so there is no gain and nothing to pay. A gain only arises if you buy below €100 on the secondary market and are repaid at €100.

Even then, most people pay nothing. The first €10,000 of capital gains you realise in a year, across all your investments together, is exempt. That allowance is per person, so a couple has €20,000, and any part of it you do not use builds up by €1,000 a year to a maximum of €15,000.

Finally, if you buy or sell a state bond on the secondary market via a broker, you will have to pay a transaction tax of 0.12%. Subscribing at issue is free of it.

The return on the state bond

The 1-year state bond of September 2026 pays 2.75% gross, which is only 1.925% after the 30% withholding tax. Earlier state bonds had an even lower return, because the interest rates set by the European Central Bank (ECB) were lower. For instance, the 5 year state bond issued in June 2022 had an interest rate of only 0.7%. In general, the interest rate on the state bond more or less follows the interest rates set by the ECB.

You should also consider the impact of inflation. In August 2026, the inflation rate in Belgium was 3.97%. So the real return of the 1-year state bond, meaning after inflation, is -1.97%. Yes, you are effectively losing money.

The 10-year bond does better but still does not clear the bar. Its 2.59% net rate gives a real return of -1.33% at today's inflation. Inflation will not stay at 3.97% for ten years, so that gap will move. But the bond locks its 3.70% in for a decade, and you carry the risk that inflation stays above it.

Should you buy the state bond?

We are not big fans of the Belgian state bond. For short-term investing (meaning a year or two), there are better alternatives.

A savings account beats the 1-year state bond today, and it does so on both the rate and the tax. The best savings accounts in Belgium are ING Tempo sparen and Belfius Flow at 3.10%, against 2.75% gross for the bond. Both cap what you can pay in each month, at €500 and €600. Keytrade Bank's High Fidelity account pays 1.90% with no cap at all.

The tax gap is the bigger one. A regulated savings account is taxed at 15% instead of 30%, and the first €1,020 of interest each year is exempt entirely. Most savers never reach that €1,020, so in practice they keep the full 3.10%. The state bond hands over 30% of its interest from the first cent.

A savings account is also more flexible. You can withdraw your money any time, without fees, and you do not have to wait for a subscription window to open or a maturity date to arrive.

Lastly, if you're investing your savings for a longer period of time, there are alternatives that will yield a much higher return than either a state bond or a savings account. In particular, ETFs are the best way for most people to grow their wealth over the long term.

ETFs, the best alternative for long-term investing

ETFs (Exchange-Traded Funds) are investment funds. They invest in hundreds, or even thousands, of stocks, bonds, or other types of investments. This diversification is a big benefit of ETFs. It makes them more attractive than an individual stock. Instead of investing in one company, you invest in an entire market through an index. For example, you can invest in a BEL 20 ETF and benefit from the performance of all the largest Belgian stocks.

Most ETFs track a market index, which is why they're also called trackers. Index investing is a style of investing based on indexes, and where you typically hold your investments for the long term. With index investing, also called passive investing, you ignore daily price changes. You trust the market will grow long-term. And the data shows that this strategy gives the highest return in most cases.

Return of an ETF vs a savings account

When you invest in an ETF, you invest in a large part of the global stock market. The stock market has given high returns over the last century, due to a growing economy and constant innovation. A globally diversified ETF like IWDA, which tracks the MSCI World index and includes stocks like Apple, NVIDIA and LVMH, delivered an average annual return of 10.2% since 1979. This is much higher than a savings account or Belgian state bond and it's a significant return above inflation.

The chart below compares IWDA against a savings account. The savings account data starts later than 1979, so the chart covers a shorter window than the figure above. You can change the dates and the amounts yourself in Backtest.

Why ETFs are great

There are several reasons why ETFs are the best long-term investment for most people.

Best suited for the long-term

Investing in ETFs compounds to substantial returns over time. And it beats the active funds sold by your bank!

Diversification

You’re exposed to thousands of companies in one go through a single fund. And diversification is key to good investing.

Simplicity

Once you’ve selected the right funds to invest in, you can sit back and watch your investments grow. There's no need to waste time analysing individual stocks.

Cheap

Partly due to the economies of scale and lack of active management costs, ETFs are a cheap way of investing.

Tax efficient

Belgium is quite unique in that capital gains for investments in stock ETFs are taxed at only 10%. There is also no withholding tax on them. This makes ETFs particularly tax efficient compared to state bonds.

Conclusion

We explained how the Belgian state bond works and how you can buy them. But we also showed why they may not be the best investment for you. For short-term investing, a good savings account is better on both the rate and the tax. For long-term investing, a safe investment like a state bond has a low return. So it is unlikely to help you meet your financial goals. ETFs are a better choice. They can build long-term wealth, diversify globally, and save on taxes. As you explore these options, align your investments with your goals and risk tolerance. This will help you make the most of your savings.