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Bonds investment

Invest in the bond market for potentially higher yield compared to cash savings deposits.

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.

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

Frequently asked questions

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