What are Fractional Bonds and how do they work?

In this article, we’re taking a closer look at Fractional Bonds on Mintos. We explore how Fractional Bonds work and the benefits of Fractional Bonds investing, as well as go over everything else you may want to know before you invest.

If you have any additional questions you’d like us to address, please let us know on our Community page. We’ll be more than happy to answer your questions about this exciting new opportunity to invest on Mintos.

And if you’d like to jump right in and check out our offers, you can of course do so anytime.

What are Fractional Bonds?

Fractional Bonds are bond-backed securities offered on Mintos. They are called “fractional” because they offer access to small parts of a larger underlying asset that an investor might otherwise not be able to afford. Our Fractional Bonds provide a convenient and affordable way for retail investors to get exposure to specific bonds and build a well-diversified investment portfolio with different asset classes.

What’s the benefit of investing in Fractional Bonds?

Fractional Bonds make bond investments accessible to retail investors. The vast majority of bonds require high minimum investments of €10 000 or more for a single investment. Moreover, many bonds, especially high-yield ones, aren’t available to retail investors at all.

This makes it difficult for many retail investors to build a bond portfolio. On Mintos, we are changing this: You can invest in small fractions of a bond, starting from just €50, and conveniently build a diversified bond portfolio.

Initially, we’ll offer investments in high-yield Fractional Bonds backed by underlying bonds issued by lending companies on Mintos. We’re also working on expanding our offering, so stay tuned for more news.

Fractional Bonds could be interesting for you if

  • You want to earn a steady Income. Bonds typically pay regular interest, known as coupon payments, which can provide a reliable income stream. This can be particularly appealing to income-focused investors or retirees.
  • You want to invest in a less volatile asset. As bonds have a predictable income flow due to their fixed rate of return, their value historically tends to fluctuate less than other asset classes such as stocks.
  • You want to diversify across asset classes. Strategic asset allocation can be a valuable strategy to help increase your returns and reduce exposure to risk.

How does investing in Fractional Bonds work on Mintos?

When you invest in Fractional Bonds on Mintos, you purchase bond-backed securities. This means you won’t hold the underlying bond directly. Instead, you hold Fractional Bonds emitted by a special purpose entity within the Mintos group that acts as the issuer. The Fractional Bonds issuer holds the underlying bond, and passes on its returns to you. Fractional Bonds are only available on Mintos.

The Fractional Bonds issuer receives regular coupon payments and the principal amount of the underlying bond at maturity. These funds will then be forwarded to investors.

If an underlying bond issuer defaults on its obligations, the Fractional Bonds issuer might not receive some or any of the coupon payments or principal. In this event, you may lose some or all of the money you invested in the Fractional Bonds.

What’s the difference between Fractional Bonds and traditional bonds?

Traditional bond

Fractional Bonds on Mintos

Minimum investment

Typically €10 000 or more

Just €50

Bond ownership

Investor holds bond directly

Investor holds bond-backed securities


Depends on the bond

Mirrors the underlying bond


Depends on the underlying bond. Typical risks include a default of the bond issuer, market risk, interest rate risk, inflation risk, and liquidity risk.

Mainly the same as for the underlying bond. Some additional risks apply, you can read more about them in our risk disclosure.

Trading venue

Stock exchange or over the counter

Available exclusively on Mintos


Considered a liquid asset

Liquidity via the Mintos Secondary Market

Do I own a part of a bond when investing in Fractional Bonds?

When you invest in Fractional Bonds, you won’t hold the underlying bond directly, nor will you directly own a part of it. Instead, you hold bond-backed securities called Fractional Bonds. The Fractional Bonds issuer (a Mintos Group company) holds the underlying bond, and passes on its returns to you.

Why do you offer Fractional Bonds rather than the underlying bond for me to hold directly?

The vast majority of bonds have minimum purchase denominations of €10 000 or more, which makes it difficult for many retail investors to build a bond portfolio. Fractional Bonds start from as little as €50, and provide a convenient way to get exposure to specific bonds and build a well-diversified investment portfolio with different asset classes.

What type of Fractional Bonds will be offered on Mintos?

Initially, we’ll offer investments in high-yield bonds issued by lending companies on Mintos. In the future, we plan to broaden our offering across different industries, such as agriculture, manufacturing, and more. Make sure to follow our blog for updates, or check out our Fractional Bonds offers anytime to see what’s available.

What return can I expect from Fractional Bonds?

The return on a specific Fractional Bonds offer depends on the coupon rate of the underlying bond. The coupon rate is determined by:

  • Inherent risk factors of the underlying bond, including the bond issuer’s creditworthiness
  • Market factors, including the general economic environment, general interest rate levels, and alternative investment opportunities in the financial sector

If you hold your Fractional Bonds until maturity, fluctuations in the underlying bond’s value will not affect your return. However, if you want to sell your Fractional Bonds on the Mintos Secondary Market, the price might be affected by supply and demand, as well as changes in the risk and market factors of the underlying bond. This means the going price on the Secondary Market might be different from the purchase price you paid.

What’s the minimum amount that can be invested in Fractional Bonds?

Investments in Fractional Bonds start from just €50.

What are the fees for investing in Fractional Bonds?

There are no fees for investing in Fractional Bonds.

What are the fees for investing in Fractional Bonds?

Just select a Fractional Bonds offer, and follow the steps to invest. You’ll need at least €50 available balance to invest.

If you’re using automated loan portfolios (such as Mintos Core or Mintos Custom), set an amount to Keep available. This ensures the allocated amount will remain available for investing in Fractional Bonds when you deposit money or receive repayments from your investments, and isn’t invested by your automated loan portfolios.

Can I cancel my investment order?

Yes, you can cancel your investment order anytime in your Fractional Bonds portfolio before the commitment day at no cost. On the commitment date, your order will become final and can’t be canceled anymore. However, you may be able to sell your investment on the Mintos Secondary Market if you want to access your money.

You can see the commitment date for your order in your Fractional Bonds portfolio.

Can I sell my investments in Fractional Bonds?

Yes, you can sell your investments on the Secondary Market on Mintos. The Secondary Market for Fractional Bonds on Mintos will be opened on 1 November 2023.

Where can I find more information about specific Fractional Bonds offers?

The main documents that provide detailed information about Fractional Bonds are:

  • Fractional Bonds base prospectuses and Final Terms documents
  • Key information documents (KIDs)
  • Underlying bond prospectus

What are the risks of investing in Fractional Bonds?

The main risks when investing in Fractional Bonds include:

  • Risks related to the underlying bond: The company issuing the underlying bond might default on its obligations.
  • Market risk: The value of the investment may decline due to events outside the control of market participants, such as an economic downturn, a financial crisis, or geopolitical events.
  • Interest rate risk: Changes in both short and long-term interest rates may affect the value of financial instruments. 
  • Inflation risk: Changes in the inflation rate affect the purchasing power of future interest and principal payments.
  • Liquidity risk: Fractional Bonds have a fixed term, with the principal being due at maturity. Investors who want to sell their investment early can only do so on the Mintos Secondary Market. There is a possibility that investors might not be able to find a buyer for their investment, or that they can only sell the investment at a lower price.

You can read more about the risks in our risk disclosure.

Can I transfer my Fractional Bonds to another platform?

Our Fractional Bonds are exclusive to Mintos. This means they can’t be transferred to other platforms.

What are the applicable regulations for Fractional Bonds?

Fractional Bonds on Mintos are regulated financial instruments. Applicable regulation includes the Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation and the Prospectus regulation. Moreover, regulation also extends to the services provided by Mintos. As a licensed investment firm, Mintos is subject to a wide scope of regulation, including MiFID and MiFIR, as well as the EU Investment Firms Directive and regulation. You can read more about this on our Investor Protection page.

What taxes do I have to pay for investments in Fractional Bonds?

You’re responsible for paying tax on your investment income according to applicable tax law in your country of tax residence. 

As a licensed investment firm, Mintos is legally required to apply withholding tax on your investment income. Withholding tax is a common practice and allows governments to tax the income generated in their countries by non-residents. However, in most cases investors are protected against double taxation by agreements between the involved countries, which means the can reduce their local taxes by the withheld amount. The withholding tax rate is 5% for EU/EEA tax residents who are investing as private individuals (legal entities are exempt).

Ready to invest?

Check out or Fractional Bonds offers.


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