Yield on ten-year government bonds in Luxembourg 2000-2023

As of June 2023, Luxembourg government bonds with maturities of close to ten years reached an average of 3.18 percent per annum. By comparison, the annual yield for treasury notes in the Grand Duchy reached an average of -0.36 in 2021.

Treasury notes: a safe haven in times of trouble

Ten-year government bonds, otherwise known as treasury notes, are debt obligations issued by a government which matures in ten years. They are considered a low-risk investment as they are backed by the government and their ability to raise taxes to cover its obligations. In August 2019, investors became more interested in these investments as global developments sparked uncertainty on the stock markets. Traditionally, government bonds from the U.S. and Germany have the highest liquidity. When stock exchanges fall with around ten percent, a German treasury note with an interest rate of around -0.37 percent is then considered a relatively safe place.

What are other options to do with your money in Luxembourg?

In March 2021, the interest rate of short-term household deposits (with an agreed maturity of up to one year) in Luxembourg was 0.07. This was the lowest of all Benelux countries (Belgium, Luxembourg and the Netherlands). Low interest rates on consumer savings are deemed a consequence of the monetary policy of the European Central Bank (ECB), as it maintains artificially low interest rates to increase inflation on the European continent. Low interest rates and uncertainty on the stock exchange might therefore explain investors’ interest in gold. The international price of gold per troy ounce has increased sharply in recent years.