What is Bund?
The Bund is Germany's flagship government bond — the most liquid and widely traded Euro-denominated sovereign debt instrument. When investors talk about 'German yields,' they typically mean the 10-year Bund.
A Bund (Bundesanleihe) is a long-term German government bond with maturities of 7, 10, 15, or 30 years. Bunds are the benchmark for Euro-denominated fixed income and represent the safest sovereign debt in the Eurozone with Germany's AAA credit rating.
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Key Characteristics
Bunds are issued with fixed coupons paid annually. They trade in units as small as €0.01, making them accessible to private investors. At year-end 2025, Bunds represented about 66% of Germany's total federal debt, with 10-year bonds accounting for 34% of that share.
Available Maturities
New Bunds are issued with 7-year, 10-year, 15-year, and 30-year maturities. The 10-year Bund is the benchmark, used globally as the reference rate for Euro sovereign debt and the basis for the Bund futures contract on Eurex.
Trading and Liquidity
With over €650 billion outstanding, Bunds are among the most liquid bonds worldwide. They're accepted by the ECB as collateral for credit operations. The Deutsche Bundesbank maintains the market through regular auctions conducted by the Deutsche Finanzagentur.
German Federal Securities Overview
| Security | German Name | Maturity | Coupon |
|---|---|---|---|
| Bund | Bundesanleihe | 7-30 years | Fixed, annual |
| Bobl | Bundesobligation | 5 years | Fixed, annual |
| Schatz | Bundesschatzanweisung | 2 years | Fixed, annual |
| Bubill | Unverzinsliche Schatzanweisung | 3-12 months | Zero coupon |
Practical Example: Buying a 10-Year Bund
You purchase the Bund 2.4% 2034 (ISIN: DE0001102580) at a price of 98.50. Face value: €10,000. You pay €9,850 plus accrued interest. Each year you receive €240 (2.4% × €10,000). At maturity in 2034, you receive €10,000 back. Your yield to maturity is approximately 2.6% — higher than the coupon because you bought below par.
Frequently Asked Questions
What is a Bund in simple terms?
A Bund is a long-term German government bond. When you buy a Bund, you're lending money to Germany — one of the world's most creditworthy borrowers — in exchange for regular interest payments and full repayment at maturity.
Why are Bunds considered so safe?
Germany has the strongest economy in Europe, a AAA credit rating, and has never defaulted on its debt. Bunds are often called 'risk-free' in Euro terms, though they still carry interest rate risk.
What's the difference between a Bund and a Treasury?
Bunds are German government bonds; Treasuries are US government bonds. Both are considered extremely safe. Key differences: Bunds pay annual coupons (Treasuries pay semi-annually), Bunds are Euro-denominated (Treasuries are in USD).
Where can I buy Bunds?
Through any broker offering European bonds, directly via Deutsche Finanzagentur's Bundeswertpapiere portal, or through ETFs that track German government bonds.
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