China Allows Pension Accounts to Buy Savings Bonds

China has opened a new investment channel for retirement savers, allowing individuals to purchase electronic savings treasury bonds through their personal pension accounts for the first time. The move, which took effect on June 10, 2026, adds a state-backed, low-risk asset to the personal pension product pool, expanding options for the country’s growing number of retirement investors.

Context

The expansion follows a joint notice issued in November 2025 by the Ministry of Finance and the People’s Bank of China, which mandated that eligible bond underwriting syndicate members offer electronic savings bonds to personal pension account holders starting June 2026, as reported by Xinhua News Agency. This policy builds on the nationwide rollout of China’s personal pension system on December 15, 2024, which had already signaled that treasury bonds would be included in the product lineup.

China’s pension system follows a “three-pillar” structure: a basic state pension, enterprise and occupational annuities, and the voluntary personal pension system. Launched as a pilot in 36 cities in November 2022, the personal pension system had attracted over 72 million account holders by November 2024, according to China’s government website.

Key Developments

On June 10, the Ministry of Finance issued two tranches of electronic savings bonds. The 3-year bonds (Tranche 3) carry a coupon rate of 1.63% per annum with a maximum issuance of 315 billion yuan (approximately US$43.5 billion), while the 5-year bonds (Tranche 4) offer 1.70% per annum with a maximum issuance of 385 billion yuan (approximately US$53.2 billion). The issuance period runs from June 10 to June 19, with interest paid annually and principal repaid at maturity in 2029 and 2031 respectively, as detailed by People’s Daily.

A total of 21 banks have been authorized as personal pension savings bond business institutions, including six state-owned banks (ICBC, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China), ten joint-stock banks, and five city commercial banks. Multiple banks, including China Construction Bank, Agricultural Bank of China, and China Merchants Bank, have already added treasury bond purchase options in their mobile banking personal pension sections, according to Cailianshe via Sina Finance.

The purchase limits are structured to accommodate both regular and pension account investors. A single account can purchase up to 500,000 yuan per tranche, with a pension-exclusive quota set at 40% of the initial flexible issuance quota. However, the practical limit for most investors is constrained by the annual pension contribution cap of 12,000 yuan per person, meaning even early adopters who have maxed out contributions since the 2022 pilot would have accumulated only about 60,000 yuan by June 2026.

Analysis

The inclusion of savings bonds in personal pension accounts addresses a key gap in the product lineup — the absence of a truly risk-free, state-guaranteed investment option. As analysts at People’s Daily noted, savings treasury bonds “backed by national credit, offer principal safety and stable returns, highly matching the allocation needs of steady-type and conservative retirement investors.”

Xue Hongyan, a special researcher at Suning Bank, told Beijing Business Today that the move “fills the gap for principal-guaranteed products backed by national credit, making the account’s risk gradient more complete.” For banks, he added, this provides a differentiated competitive advantage in attracting conservative clients.

The interest rate advantage is significant in China’s current low-interest-rate environment. Major state-owned banks offer 3-year and 5-year time deposit rates of just 1.25% and 1.30% respectively, while savings bonds offer 1.63% and 1.70% — a meaningful premium. Even pension-exclusive time deposit products from major banks offer only 1.55% for 3-year and 1.60% for 5-year terms.

Tian Xuan, Dean of the Institute of National Financial Research at Tsinghua University, highlighted three key considerations in an interview with Economic Daily via China Daily: savings bonds’ low-risk profile will enhance the personal pension system’s attractiveness; they enrich product types across the risk spectrum; and personal pension funds flowing into the bond market will optimize investor structure and strengthen patient capital.

What’s Next

The policy is part of a broader effort to strengthen China’s pension system in the face of rapid population aging. By 2035, China’s population aged 60 and above is expected to exceed 400 million. The development of the third pillar — personal pensions — is seen as essential to reducing pressure on the state pay-as-you-go system and encouraging long-term, patient capital formation in financial markets.

Looking ahead, questions remain about whether the inclusion of savings bonds will meaningfully increase personal pension account opening and contribution rates, which have lagged behind initial expectations. The practical impact is constrained by the annual contribution cap, but the addition of state-backed bonds provides a compelling option for conservative investors and those nearing retirement who prioritize capital preservation above all else.