Deposit or government bonds: which pays more after tax

At the same rate, Ukrainian government bonds (OVDP) pay more than a bank deposit: for individuals, bond income is not taxed, while the bank withholds 23% from deposit interest. A deposit, on the other hand, is easier to open and understand, and deposits are currently guaranteed by the state in full. For most people it makes sense to combine the two: a deposit or savings account for the emergency fund, bonds for money you will not need before maturity.

Andrii Kolisnyk October 27, 2026 5 min read

What a deposit is and what OVDP are

A deposit is money you give a bank for a set term in exchange for interest. The bank uses it to issue loans and pays you the fixed rate in your contract. You can open a deposit in your banking app in a few minutes.

OVDP are Ukrainian domestic government bonds. By buying them you lend money to the state, and on the agreed date the state repays the face value and pays interest. The face value of one bond is UAH 1,000. You can buy OVDP through banks and brokers, and military bonds also through Diia, the government services app.

The main difference: tax

The bank withholds 18% personal income tax and the 5% military levy from deposit interest. That is 23% of the accrued interest in total, and you receive the net amount. According to Diia, income from OVDP is not included in taxable income. That is why the same rate on a deposit and on bonds puts different money in your pocket. The deposit calculator shows how much of the interest you keep on your own deposit.

Income on UAH 100,000 over 12 months at the same 15% annual rate. The rate is illustrative. WM² calculation.

So in take-home terms, bonds at 15% equal a deposit at 19.48%. To compare fairly, convert the bond rate into a “deposit equivalent”: divide it by 0.77.

Which deposit rate OVDP are equal to
Bond rate	A deposit gives the same take-home return at
12%	15.58%
14%	18.18%
16%	20.78%

The rule works the other way too: a deposit at 16% brings 12.32% after tax, which is less than bonds at 13%.

Side-by-side comparison

	Deposit	Government bonds (OVDP)
Tax on income	23% (18% income tax + 5% military levy), withheld by the bank	not included in taxable income
Who guarantees it	Deposit Guarantee Fund: 100% of the deposit now, up to UAH 600,000 after martial law	the state as the borrower; not covered by the FGVFO
Minimum amount	depends on the bank, often from UAH 1,000	one bond, face value UAH 1,000
How to open	banking app or branch	bank, broker, or Diia for military bonds
Getting money out early	depends on the contract: often with the loss of part of the interest	sell before maturity through a bank or broker at the market price, which may be lower
Currency	hryvnia, dollar, euro	issues in hryvnia, dollars and euros
Complexity	low	slightly higher: maturities, coupons, market price

How to buy OVDP, step by step

Choose where to buy. OVDP are sold by banks and brokers; military bonds can also be bought in Diia. Compare fees for buying, custody and selling.
Open a securities account. At most banks this takes a few minutes in the app; in Diia the account is opened together with your order.
Choose an issue. Look at the maturity date, the currency and the yield to maturity. Pick a term for which you definitely won't need the money.
Enter the number of bonds and pay. The face value of one bond is UAH 1,000. According to Diia, bonds are credited within three business days.
Wait for maturity. On the maturity date the face value and interest arrive in your account or on your card.

Guarantees: what happens if a bank fails

Deposits of individuals in banks that participate in the Deposit Guarantee Fund are protected. While martial law lasts, the FGVFO guarantees the full amount of the deposit together with accrued interest. After martial law ends, the guaranteed amount returns to UAH 600,000 per depositor per bank. So it is better to spread large sums across several reliable banks in advance, without waiting for the rules to change.

OVDP are not covered by the Deposit Guarantee Fund, but they are direct state debt. Ukraine has kept servicing OVDP during the years of full-scale war. Still, “government” does not mean “risk-free”: if you sell a bond before maturity, the price depends on the market.

When to choose a deposit

You may need the money at any moment: then a savings account or a deposit with early withdrawal is better.
The amount is small and your bank's or broker's fees for bonds are significant.
You want the simplest option: open it in the app and forget about it until the end of the term.
The bank offers a promotional rate that beats bonds after tax. It happens, so recalculate both options every time.

When to choose OVDP

You know for sure you won't need the money before the maturity date.
The amount is large, and the 23% tax difference adds up to real money.
You want to lock in a return for longer than deposits offer.
You want to keep part of your savings in foreign currency at interest: currency OVDP often pay more than currency deposits.

How to combine them

You don't have to pick just one. A setup that works for most people:

An emergency fund of 1-2 months of expenses in a savings account or a deposit with early withdrawal. How much you need and how to work it out is covered in our article on the emergency fund.
The rest of the fund in a fixed-term deposit or in OVDP with different maturity dates, so the money comes back in parts.
Money for goals 1-3 years away in OVDP, if the return after fees beats a deposit.

Before choosing, compare both options with inflation: the after-tax income should be higher than the rise in prices, otherwise your money still loses value. How to calculate this is covered in “Inflation: how it eats your savings”.

In short

The main difference is tax: 23% is withheld from deposit interest, bond income is not taxed.
To compare, divide the bond rate by 0.77: bonds at 15% equal a deposit at 19.48%.
Deposits are currently guaranteed by the FGVFO in full, up to UAH 600,000 after martial law. OVDP are direct state debt.
A deposit is simpler and handier for an emergency fund; bonds pay more on money you won't need before maturity.
Before buying OVDP, check your bank's or broker's fees.

Sources

This article is for information only and is not financial or investment advice. Check current terms with your bank or financial institution before making decisions.