Are Letras del Tesoro really risk-free?

They carry Spain's sovereign credit (currently A/A+/A-, depending on agency). Default risk over 12 months is near-zero. Re-investment risk (rates fall before you roll) is the real exposure.

Direct bonds give you a maturity date — you know exactly what you receive. Bond ETFs have constant duration but no maturity — you carry permanent rate risk. Use direct bonds for known liabilities (school fees, retirement income), ETFs for portfolio diversification.

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Bond Investing from Spain

Spanish Letras del Tesoro hit 3.0–3.4% in 2026 with zero credit risk and Spanish-tax-friendly treatment. Add EU sovereigns, corporate IG, and inflation-linked bonds (linkers) for a fixed-income sleeve that actually preserves capital after tax and inflation.

Last updated 1 June 2026

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Instrument	Yield (2026)	Duration	Min ticket	Where to buy
Letras del Tesoro 3m/6m/12m	2.9–3.4%	<1 yr	€1,000	Tesoro.es, Renta 4
Bonos del Estado 3–5 yr	3.0–3.4%	3–5 yr	€1,000	Auction or secondary
Obligaciones del Estado 10–30 yr	3.4–3.8%	10–30 yr	€1,000	Secondary market
German Bunds 10 yr	2.6–2.9%	10 yr	€1,000	Brokers
EU corporate IG ETF (IEAC)	4.0–4.6%	5 yr avg	€50	Any UCITS broker
Inflation linkers (IBCI)	1.0% + CPI	8 yr avg	€50	Any UCITS broker

Letras del Tesoro — the Spanish-resident default

12-month Letras at 3.0–3.4% beat almost every Spanish bank deposit on yield, with zero credit risk. They're taxed as savings income (19–28%) at maturity — not annually — giving a small tax-deferral benefit over distributing bond funds.

Buy direct via tesoro.es (free, requires digital cert / Cl@ve) or via any Spanish broker (€2–€10 fee). Roll quarterly or semi-annually to capture the curve without locking in long duration.

Duration risk in 2026

ECB rate-cut expectations make 5–10 year bonds attractive for capital gains if rates fall further, but vulnerable if inflation re-accelerates. A barbell of Letras (short) + 10-year sovereigns (long) gives a defensive curve exposure without timing the cycle.

Drawdown bond ladders.

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