Two instruments, similar headline rates, and a materially different outcome after twelve months. The comparison between a bank deposit and domestic government bonds is the most common savings question in Ukraine right now, and it is usually answered on the wrong basis — by comparing the numbers on the rate sheet.
Where the difference actually sits
| Feature | Bank deposit | OVDP |
|---|---|---|
| Headline rate | set by the bank | 15–16% (recent placements 15.2–16.2%) |
| Personal income tax on income | applies | exempt |
| Military levy | applies | exempt |
| Credit risk | the bank, plus the guarantee fund | the state directly |
| Access before maturity | early withdrawal terms | secondary market sale |
| Minimum entry | very low | higher, varies by broker |
The tax line is the one that changes the arithmetic. Deposit interest is subject to personal income tax and the military levy; OVDP coupon income is exempt from both. Two instruments quoted at the same nominal rate therefore do not deliver the same return, and the gap is not small.
What each one actually is
A deposit is a loan to a commercial bank, backed within limits by the Deposit Guarantee Fund. The risk being taken is the bank's, and for amounts inside the guarantee limit that risk is largely mutualised.
OVDP is a loan directly to the state. There is no guarantee fund above it, because there is nothing above a sovereign in its own currency — the state is the last line. That is simultaneously the strength and the weakness of the instrument.
This matters for how the two should be sized. A deposit within the guarantee limit and a government bond are not the same risk wearing different labels. For a household emergency fund, the guarantee and the instant access are worth more than a few points of yield. For money with a genuine multi-year horizon, the tax exemption compounds into a real difference.
The part I'd be careful about
The most frequent mistake is treating OVDP as a deposit with a better rate. It is not. Selling before maturity means selling into the secondary market at whatever price exists that day, which can be above or below what was paid. Money that might be needed suddenly does not belong there.
The second is ignoring where the underlying risk points. Both instruments ultimately lean on the same sovereign — a banking system in a wartime economy is not independent of the state that stands behind it. Splitting money between a deposit and OVDP feels like diversification and largely is not.
My take
For money that will sit for a defined period and is genuinely not needed before then, the tax treatment makes OVDP the stronger instrument at equivalent nominal rates. That is arithmetic, not opinion.
For a reserve that might be needed next month, the deposit wins on access and on the guarantee, and the yield difference is not worth the illiquidity. The honest answer for most people is both, split by horizon rather than by preference — with the reserve in the accessible instrument and the long money where the tax exemption works.
Bottom line: at the same nominal rate these are not the same product. Tax favours bonds; liquidity and the guarantee favour deposits. Split by how soon the money is needed.
This is analysis, not investment advice.