BTPs — Buoni del Tesoro Poliennali (Multi-Year Treasury Bonds) — have been the preferred investment instrument for Italians for decades. Safe, guaranteed by the State, with periodic coupons: they seem perfect. But how many people actually know how to calculate the yield of a BTP and assess its convenience compared to other instruments? In this comprehensive guide, you'll discover everything you need to know about BTPs in 2026: how they work, how to calculate gross and net yield, what coupons and maturity dates mean, and when it's truly worth investing in them.
What Are BTPs: Definition and Key Features
Buoni del Tesoro Poliennali (BTPs) are medium-to-long-term Italian government bonds issued by the Ministry of Economy and Finance (MEF). In practice, when you buy a BTP you are lending money to the Italian State, which in return commits to repaying it at maturity and paying you a fixed coupon (interest) every six months.
The main features of a BTP are:
- Maturity: from 3 to 50 years (BTPs are available at 3, 5, 7, 10, 15, 20, 30, and 50 years)
- Coupon: fixed and paid every 6 months, expressed as a percentage of the nominal value
- Nominal value: generally 1,000 euros per minimum lot
- Interest rate: set at the issuance auction
- Redemption: at maturity, at nominal value (100% of capital)
BTPs are distinguished from other government bonds by their fixed coupon: unlike BTP Italia or CCTs (variable rate), the coupon of a classic BTP never changes over time. This can be an advantage or a disadvantage depending on the direction of interest rates.
Types of BTPs: Classic BTP, BTP Italia, BTP Futura, and Valore
Not all BTPs are the same. In 2026, the Italian government bond market offers several variants, each with specific characteristics.
Classic BTP (fixed rate)
This is the traditional BTP: fixed coupon every six months, redemption at maturity. Ideal for those who want certainty of return. The most common maturities are 10 and 30 years.
BTP Italia (indexed to ISTAT inflation)
The BTP Italia is indexed to Italian inflation (FOI index). The coupon and principal are adjusted based on actual inflation. It is designed to protect purchasing power over time. Coupons are paid every 6 months and include a loyalty bonus for those who hold the bond until maturity.
BTP Futura
Created during the pandemic, the BTP Futura has step-up coupons that increase over time and a final bonus linked to Italian GDP growth. It is intended exclusively for retail investors (not for institutions).
BTP Valore
Launched starting in 2023, the BTP Valore is the most recent version designed for retail savers. It offers step-up coupons over time and a 1% final bonus for those who hold the bond until maturity. It can only be purchased directly, with no secondary market during the issuance period.
How to Calculate the Yield of a BTP
Calculating the yield of a BTP is not complicated, but it requires distinguishing between different concepts: current yield, yield to maturity (YTM), and net yield.
Current Yield
The current yield is the ratio between the annual coupon and the purchase price of the bond:
Current Yield = (Annual Coupon / Purchase Price) × 100
Practical example: You purchased a BTP with a 4% coupon (i.e., 40 euros per year on 1,000 euros nominal) at a price of 95 (i.e., 950 euros per 1,000 euros nominal).
Current Yield = (40 / 950) × 100 = 4.21%
The current yield is higher than the nominal coupon because you paid below par for the bond.
Yield to Maturity (YTM)
The yield to maturity is the most complete and accurate measure of a bond's return. It takes into account all future coupons, the gain (or loss) from the difference between the purchase price and redemption at 100, and the time remaining to maturity. A simplified formula is:
YTM ≈ [Coupon + (100 - Price) / Years to Maturity] / [(100 + Price) / 2]
Example: BTP with 3.5% coupon, price 96, maturity in 5 years:
YTM ≈ [3.5 + (100 - 96) / 5] / [(100 + 96) / 2] = 4.3 / 98 ≈ 4.39%
Net Yield: Taxation on BTPs
BTPs benefit from a preferential tax regime:
- Withholding tax on coupons: 12.5% (compared to 26% for stocks and mutual funds)
- Capital gains tax: 12.5%
- Stamp duty: 0.2% per year on the market value of the portfolio
- IRPEF exemption: BTP income is excluded from the IRPEF (personal income tax) tax base
Net Yield = Gross Yield × (1 - 0.125)
Example: BTP with 4.5% gross yield: Net Yield = 4.5% × 0.875 = 3.94%
How to Buy BTPs in 2026
There are two main ways to buy BTPs: at auction on the Primary Market (through a bank or broker, during the MEF's monthly auctions) or on the MOT Secondary Market of Borsa Italiana, where you can buy and sell already-issued BTPs at any time during market hours. You can purchase through your bank, an online broker (Fineco, Directa, etc.), or Poste Italiane.
BTPs: Yields in 2026
As an indication, in 2026 gross BTP yields are moving within these ranges:
- 2-year BTPs: 2.8% - 3.2% gross
- 5-year BTPs: 3.2% - 3.6% gross
- 10-year BTPs: 3.5% - 4.0% gross
- 30-year BTPs: 4.0% - 4.5% gross
These yields are significantly higher than the minimum levels reached between 2016 and 2021, when 10-year BTPs yielded less than 1%.
BTP-Bund Spread: What It Is and Why It Matters
The BTP-Bund spread is the yield difference between the Italian 10-year BTP and the German Bund. It is an indicator of country risk: the higher the spread, the more the market considers Italian debt risky. An average spread (100-150 basis points) indicates a balance between yield and stability.
BTPs vs Alternatives: Comparison with Deposit Accounts, ETFs, and Postal Savings Bonds
BTPs vs Deposit Accounts: Fixed-term deposit accounts offer gross yields between 2% and 3.5% but are subject to 26% tax. On a 3% gross return, the net from a deposit account is about 2.22%, while a BTP at 3% gross offers about 2.625% net. BTPs win on taxation.
BTPs vs Postal Savings Bonds: These also benefit from the 12.5% tax rate and are guaranteed by the State, but they often offer lower yields than BTPs of the same duration.
BTPs vs Bond ETFs: ETFs offer diversification but are subject to 26% tax. For the Italian investor, direct BTPs can be more tax-efficient.
Risks of BTPs
Interest rate risk: If rates rise after your purchase, the BTP's price drops on the secondary market. If you hold to maturity, you always receive 100% of the nominal value.
Country risk: Although remote, there is a theoretical risk that the Italian State may be unable to repay its debt. Eurozone membership significantly reduces this risk.
Inflation risk: If inflation exceeds the BTP's yield, real purchasing power decreases. In this case, BTP Italia bonds are more suitable.
Practical Example: Complete Calculation of a BTP Investment
Scenario: You invest 10,000 euros in a BTP with a 4.00% coupon, purchase price of 98, maturity in 10 years.
- Semi-annual net coupon: 10,000 × 2% × 0.875 = 175 euros
- Annual net coupons: 175 × 2 = 350 euros
- Net capital gain: (10,000 − 9,800) × 0.875 = 175 euros
Total over 10 years: Net coupons 3,500 + Capital gain 175 + Principal 10,000 = 13,675 euros
Annualized net yield: approximately 3.34% on the 9,800 euro investment.
You can simulate personalized scenarios with our free online financial calculators and discover the power of compounding with our guide on simple vs compound interest.
Strategies for the Italian Saver
Hold to Maturity: You buy and hold until maturity, collecting coupons without worrying about price fluctuations.
Bond Ladder: You spread your capital across BTPs with different maturities (2, 5, 10 years). When one matures, you reinvest in new issues.
Diversification: Complement BTPs with a share of deposit accounts and perhaps equity ETFs. Plan with our family budget tool.
BTPs and Retirement
Long-term BTPs (20-30 years) can be an effective instrument for building a fixed income supplement to your pension. First assess your pension situation with the 2026 retirement age calculator and our severance pay (TFR) calculator.
FAQ: Frequently Asked Questions About BTPs
Is it safe to invest in BTPs? BTPs are considered among the safest investments in Italy, guaranteed by the Italian Republic.
Can I lose money? Only if you sell before maturity at a price lower than your purchase price. By holding to maturity, you always recover 100% of the nominal value.
When are coupons paid? Every 6 months, on the dates established at issuance.
What is the minimum amount? 1,000 euros nominal, also purchasable in multiples.
How are they taxed? 12.5% on coupons and capital gains, with exemption from IRPEF (personal income tax).
Conclusion: Is It Worth Investing in BTPs in 2026?
BTPs in 2026 represent a concrete opportunity for Italian savers seeking safety, guaranteed returns, and tax advantages. With gross yields between 3.5% and 4% on the 10-year bond, the net return exceeds many banking alternatives. The key is choosing the right maturity and always calculating the effective net yield. Explore all the free financial calculators on CalcolatoriGratis.com to simulate your personal scenario.