What are Securities?

Securities are instruments of public debt issued by the government of a country, in this case by the government of the Republic of Albania. There are two types of securities:

- Treasury Bills
- Treasury Bonds

What are the main features of  Securities?

- They are considered with 0% risk, being a sovereign emission, ie of the Republic of Albania.
- They are liquid, in the sense that they can be sold at any time, after the initial investment, with a few exceptions. The initial investment is made in the Primary market; but also in that Secondary. The latter has not yet received proper development. *
- The interest of securities is called Yield.
- The price of securities is used for discounting the amount in the case of Treasury Bills, but also for trading these Securities. Yield and price are inversely proportional to each other. Yeldi determines the price of Treasury Bills. So the higher the Yield, the lower the price, and vice versa.

* The primary market is the market where securities are traded from their issuer to the buyer. The secondary market is the market in which securities are traded again, after their first purchase.

What are Treasury Bills? 

Treasury bills are one of the instruments of public debt. Treasury bills have a maturity of 3, 6, or 12 months and are discounted based on the issue yield. This, in practice, means that the client first pays the purchase price and at maturity receives the initial investment, ie the principal

What are the main features of the Treasury Bills?

- Very liquid instruments.
- They are traded in the Primary market and, for individuals, the participation is with non-competitive offer, so they benefit as interest the weighted average yield of the auction where they participate.
- The floor amount to invest in Treasury Bills is LEK 300,000.00 and can be increased by multiples of ten thousand.
- Applying for Treasury Bills is done through a bank account where the individual has to pay an application fee that varies from one Bank to another. *

* The interest rate does not change from bank to bank, as it is determined at auction.

What are Treasury Bonds?

Bonds, unlike Treasury Bills, pay interest in the form of a coupon every 6 months, so the annual interest is divided into two installments. Bonds are longer-term investments than bonds and maturities are 2, 3, 5, 7 and 10-year. Auctions for 7 and 10 year terms take place every 3 months, while for the other three maturities they take place more often. Auctions can be new auctions or reopenings of the most recent auction. In recent years, there has been an attempt to develop the secondary market and 3 and 5 year bonds are traded for clients only in the secondary market.

Characteristics of Treasury Bonds:

- The minimum amount to invest is LEK 500,000.00 and increases by multiples of one hundred thousand.
- Bonds, like Treasury Bills, are title deeds, which means that, in addition to being freely traded, they can also be used as collateral.
- Government bonds, in general, are considered one of the best ways of investing for individual clients or businesses, both in terms of Security and the Interest they offer.
- Applying for Treasury Bonds is done through a bank account where the individual has to pay an application fee that varies from one Bank to another. *

* The interest rate does not change from bank to bank, as it is determined at auction.