HSBC Bonds Investment I Singapore bonds

Invest in bonds for potentially higher returns

By investing in bonds, you may receive steady interest income with a potentially higher yield and return compared to the interest you'd earn on cash savings rate over the same amount of time.

Find out how to invest in bonds with us.

How to invest

Open an Investment account to learn more about account opening

Benefits

Bonds offer several key benefits:

Higher interest potential than cash savings accounts
Diversify your investment risk
Potential long-term capital gain
Earn a regular stream of interest income

What is a bond?

A bond is essentially a loan that an investor – you – gives to the issuer of the bond. In return for this loan, the issuer promises to pay interest and return the initial investment when it is due.

Bonds usually feature in every investor's balanced portfolio. This is because they add stability and diversity due to their relatively low volatility compared to other investments.

The income potential from bonds is reflected in the coupon rate. This rate can be fixed or floating, and income payments could be made periodically or at the bond's maturity. A bond reaches maturity at a specified future date. This is when your principal investment will be repaid.

Bonds are mainly for medium- to long-term investment. So you should be prepared to commit to the full investment term, as some or all of your investment could be lost if you sell early.

Things to consider

A bond's coupon rate depends on the credit quality of the bond issuer. The top-quality bonds are usually issued by governments, followed by bonds from government-linked companies, banks and corporations
Non-investment grade bonds and unrated bonds are riskier, but offer potentially higher returns due to the higher risk premium
New bond issues may have an effect on the value of current bonds, and therefore your earned interest income. Interest rate risk increases proportionately with the length of bond maturity
Your bond value may decrease over a longer term due to inflation
Exchange rate movements could cause fluctuations in your return if your bond is issued in a foreign currency
If a bond issuer defaults due to financial difficulties, you run the risk of losing your investment

Types of bonds

Corporate and Government Bonds
Corporate bonds	Government bonds
Description: A corporate bond is debt security, issued by a private or public company to raise capital. An investor who buys a corporate bond is lending money to the company in return for interest payments and return of face value upon maturity of the bond or when the bond is called by the issuer (where applicable). Characteristics: Issuing corporation Par value / Face value Interest rate / Coupon rate (if applicable) Maturity (if applicable) Crediting rating (Investment grade / High Yield) Payment rank structure	Description: A government bond is debt obligation, issued by a government to support government spending and obligations. An investor who buys a government bond is lending money to the government in return for interest payments and return if principal upon maturity of the bond (where applicable). Characteristics: Issuing country Par value/ Face value Interest rate / Coupon rate Maturity (if applicable) Crediting rating (Investment grade / High Yield)

Corporate and Government Bonds
Corporate bonds	Description: A corporate bond is debt security, issued by a private or public company to raise capital. An investor who buys a corporate bond is lending money to the company in return for interest payments and return of face value upon maturity of the bond or when the bond is called by the issuer (where applicable). Characteristics: Issuing corporation Par value / Face value Interest rate / Coupon rate (if applicable) Maturity (if applicable) Crediting rating (Investment grade / High Yield) Payment rank structure
Government bonds	Description: A government bond is debt obligation, issued by a government to support government spending and obligations. An investor who buys a government bond is lending money to the government in return for interest payments and return if principal upon maturity of the bond (where applicable). Characteristics: Issuing country Par value/ Face value Interest rate / Coupon rate Maturity (if applicable) Crediting rating (Investment grade / High Yield)

We have a wide range of investment-grade bonds and selective range of high-yield bonds with maturity ranging up to 30 years

Corporate bonds, supranational bonds, government/quasi-government bonds
Fixed-rate bonds, floating rate coupon bonds
Available in multiple currencies: USD, AUD, CAD, CNH, EUR, GBP, NZD, SGD

Things to know

Bonds Fees & Rates
Custody charge	Transfer of bonds in	Transfer of bonds out
No charges	No charges	USD100 (USD109 inclusive of GST where applicable)

Bonds Fees & Rates
Custody charge	No charges
Transfer of bonds in	No charges
Transfer of bonds out	USD100 (USD109 inclusive of GST where applicable)

Fees and charges (PDF) Download

This document is provided for information only and is not intended as an offer to buy or sell securities. Opinions and estimates expressed are subject to change without notice and HSBC expressly disclaims any and all liability for representation or warranties, expressed or implied, contained herein or for omissions. As this document is circulated to all clients, the specific investment objectives, personal situation and particular needs of any specific person have not been taken into consideration. HSBC does not but may from time to time have an interest in the securities and may hold long or short positions for its own account or those of its clients.

The price of bonds can and does fluctuate, and any individual bond may experience upward or downward movements, and may even become valueless. There is an inherent risk that losses may be incurred rather than profit made as a result of buying and selling bonds. The holder of the bonds bears the credit risk of the issuer and has no recourse to HSBC unless the latter is the issuer itself. The decision to place the investment should be based on your own judgment without relying on any material provided or advice given by the bank or its representative.

How to invest

Contact one of our advisors to get started.

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Frequently asked questions

Generally, bond prices are inversely related to interest rate movements. A rise in interest rates could see a fall in bond prices. The price adjustment compensates the buyer for the coupon which is lower than comparable market rates. Similarly, if rates fall, the buyer pays a higher price for receiving a coupon that is higher than comparable market rates. Investors who choose to sell their bonds in a rising interest rate environment will suffer a capital loss if bond values are now below the price they paid. On the other hand, if investors continue holding the bond, they will incur opportunity cost as their funds could have been invested in higher yielding instruments.

Market price fluctuations may not matter as much for investors who buy and hold as they will receive interest throughout the life of the bond and principal at maturity, provided there is no issuer default. Investors in bond funds, on the other hand, may be affected by interest rate movements as these will have impact on the funds' net asset value and hence the price at which investors can redeem their units.

Bonds from HSBC can be categorised by:

Types of issuers: Corporate bonds, supranational bonds and government/quasi-government bonds
Fixed rate bonds, floating rate coupon bonds
Available in multiple currencies:- USD, AUD, CAD, CNH, EUR, GBP, NZD and SGD

HSBC offers you a wide selection of investment grade and selective range of high-yield bonds with tenors of up to 30 years.

Some of the basic criteria are listed below:

Premier customers.
Accredited investors.
Passing the Customer Account Review (CAR), where applicable.
Acknowledging a Risk Warning Statement, where applicable.
However, some bonds have additional criteria; please check with your RM to ascertain how you might meet them.
Please note that this product is not eligible for US citizens/residents, Canadian residents and Saudi Arabian residents.

If you already have an HSBC Investment Services/Securities account, you can simply contact your Relationship Manager to execute your bond order. We also offer bond trading services through our branches. To open an Investment Services/Securities account, simply visit any HSBC branch in Singapore.

No. You can sell your bond before it matures and benefit from capital appreciation if the selling price is higher than the original buying price. Under normal market circumstances, HSBC will repurchase bonds at the prevailing market price, subject to the liquidity of the bond. However, the buying price offered by HSBC may differ from the original selling price due to changes in market conditions.