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Learn more about bonds / CDs

Learn more about the benefits, key features and risk factors of investing in bonds.


What is a bond / CD?

It's important to have some cash savings for emergencies. But adding bonds and certificates of deposit (CDs) to your portfolio can give you a better return than if you left all your cash in a savings account. Here's what we have to offer:

  • Bonds, issued by governments including China, the US and Hong Kong, local quasi-government bodies, supranationals and well-known corporations around the world.

  • CDs, issued by different high credit quality financial institutions like banks.

  • Initial Public Offerings (IPOs) for various bonds and CDs.

For more information, access IFEC's The Chin Family website.

How do bonds/CDs work? – illustrative examples

Mr. Chan purchased the following bond on 6 Jan Year 1

Face value Offer price Coupon rate Coupon frequency Maturity date Initial payment
USD100,000 98% 3% Annually 1 Jan, Year 3 purchase amount USD98,000 + accrued interest* USD41.67 = USD98,041.67

Mr. Chan purchased the following bond on 6 Jan Year 1

Face value USD100,000
Offer price 98%
Coupon rate 3%
Coupon frequency Annually
Maturity date 1 Jan, Year 3
Initial payment purchase amount USD98,000 + accrued interest* USD41.67 = USD98,041.67

*Accrued interest : USD100,000 x 3% x 5 days/360 days = USD41.67 for receiving/releasing the bond holding 5 days after last interest payment date

Mr Chan will receive an interest payment of USD3,000 (USD100,000 x 3%) in Year 2, on 1 January.

He will receive the final coupon payment of USD3,000 and the face value amount of USD100,000 in Year 3, on 1 January.

Face value: USD100,000

Total coupon payment: USD100,000 x 3% x 2 years = USD6,000

Total return: USD100,000 + USD6,000 − USD98,041.67 = USD7,958.33

Return = 3.98% p.a.

Different ways to look at bonds

Find out more about bonds/CDs