Auction Details
📊 Performance Breakdown
Investing in Letras del Tesoro (Spanish Treasury Bills) and government bonds is a popular method for individuals in Spain to protect their capital from inflation with near-zero risk. Because they are issued directly by the public treasury, they represent sovereign debt backed by the Kingdom of Spain. Unlike products such as savings accounts, Treasury Bills operate under a discount pricing model, meaning you do not pay the full nominal amount upfront. Instead, you pay a lower, discounted purchase price and receive the full nominal value upon maturity.
Our calculator projects returns for auctions in 2026 using marginal interest rates from recent issues. It calculates the discounted acquisition price, the gross interest you will earn, and estimates the final personal income tax (IRPF) liability under Spain’s savings tax base. It also highlights advantages such as the absence of tax withholding at source when the bills mature.
⚙️ Treasury Bill Discount Formulas
The purchase price of Spanish Treasury Bills is calculated using simple interest and a standard 360-day commercial calendar base:
- Discounted purchase price: Calculated by dividing the nominal value by the sum of one plus the marginal interest rate (annual rate in decimals) multiplied by the fraction of the year representing the bill’s term.
- Gross interest: The difference between the nominal value at redemption (multiples of €1,000.00) and the discounted price paid at auction.
- Zero withholding tax: Unlike dividend payouts or bank deposit interest, Spain does not withhold income tax at source on Treasury Bills, giving you full access to the gross returns until your annual tax declaration.
📊 Practical Examples of Treasury Bill Returns
Here are two simulations of investing in Letras del Tesoro over different terms:
- Requested nominal capital: **€10,000.00** (10 Bills)
- Term of asset: **12 months**
- Marginal interest rate: **3.00%** per annum
- Purchase price calculation: €10,000.00 divided by (1 plus 0.03 multiplied by 12/12) = **€9,708.74**
- Requested nominal capital: **€20,000.00** (20 Bills)
- Term of asset: **6 months**
- Marginal interest rate: **3.20%** per annum
- Purchase price calculation: €20,000.00 divided by (1 plus 0.032 multiplied by 6/12) = **€19,685.04**
⚠️ Common Public Debt Investment Mistakes
1. Failing to calculate the initial security deposit
When bidding for Treasury Bills online via the official portal, you must transfer a security deposit equivalent to 101.00% of the requested nominal capital. The difference between this deposit and the actual purchase price is refunded to your bank account a few days after the auction.
2. Overlooking Bank of Spain transfer commissions
While bidding for bills directly is free of commissions, the Bank of Spain charges a flat fee of 0.15% (minimum €0.90, maximum €200.00) to transfer the final redemption funds from your central bank account to your regular commercial bank account.
3. Confusing Treasury Bills with Treasury Bonds
Treasury Bills (Letras) are short-term instruments maturing in 3 to 12 months that pay interest via discounted purchasing. Treasury Bonds (2 to 5 years) and Obligations (10 to 30 years) pay explicit annual interest coupons and have a different financial structure.
❓ Frequently Asked Questions (FAQ)
The minimum nominal purchase is €1,000.00, which represents one Treasury Bill. All subscription amounts above this limit must be made in exact multiples of €1,000.00 (e.g. €2,000.00, €3,000.00, etc.).
Interest earned is taxed under Spain's savings tax base (base imponible del ahorro) as income from movable capital. The net gain (nominal value minus purchase price and bank transfer fees) is taxed under a progressive scale starting at 19.00% for the first €6,000.00.
Yes, you can sell your bills before maturity on the secondary market (AIAF fixed-income market) through your broker or bank. However, the selling price will depend on current interest rates, and you may lose money if market rates have risen since your purchase.
The marginal rate is the lowest accepted rate in a Treasury competitive auction. This rate is applied uniformly to all winning bidders, regardless of the rate they originally requested.
Yes, the Treasury allows you to request the direct reinvestment of your maturing funds into new bills. This lets you bypass bank transfer fees and keeps your capital working continuously.
For non-competitive bids made by individuals through the Bank of Spain, the limit is €5,000,000.00 per auction. Bids above this amount must be competitive, meaning they are subject to rate acceptance by the Treasury.