Fixed-rate bond

Fixed-rate bond

Bonds are a financial instrument in which the investor lends money to an organisation. The entity can be the government, a bank, or a corporation, and it borrows money for a fixed period at a defined interest rate. 

A debt instrument that yields the same interest for its tenure is best characterised as a fixed-rate bond. Fixed-rate bonds have some appeal even though they are frequently categorised as classic bonds. This bond is appropriate for investors who do not need additional funds and are seek ways to create consistent but assured returns based on their present resources. 

What are fixed-rate bonds? 

Fixed-rate bonds, commonly called fixed-income securities, are debt instruments that ensure a guaranteed income. These bonds have a maturity date and a fixed interest rate. In other words, interest payments are anticipated. In light of this, fixed-income securities provide investors with a steady flow of fixed-interest payments known as coupon payments. 

Fixed-rate bonds are available in a variety of terms. In general, interest rates increase as term duration increases. Often, a minimum deposit is needed to open an account for fixed-rate bonds. Unlike many savings accounts, you are frequently only allowed to make a single deposit when you open the account. You may, however, be given the option by fixed-rate bond dealers to choose between monthly and yearly interest payments. 

How do fixed-rate bonds work? 

A fixed-rate bond is a long-term debt obligation with a fixed coupon rate throughout its life. Until the bond matures, the fixed rate is payable on precise dates as specified in the trust indenture at the time of issuance.  

 The advantage of buying a fixed-rate bond is that investors are sure of the amount and duration of their interest payments. The bondholder can accurately forecast his return on investment if the bond issuer does not default or call in the bonds.  

 Fixed-rate bonds maintain their fixed rate and do not fluctuate with the market or an index, unlike floating or variable-rate bonds. As a result, after the term, investors receive the anticipated returns.  

Advantages of fixed-rate bonds 

The advantages of investing in fixed-rate bonds are: 

  • Investors know the interest they would earn on their deposits for a specified investment period, one of the main advantages of fixed-rate bonds. Also, the bond’s principal is returned to the investor when it matures. 
  • Bond investments with fixed rates help to keep the portfolio’s fair balance. The fixed return balances out the fluctuation of the market. So, these bonds provide a means for saving money to meet the demands and wants of the investor. Investors can pick a tenure that corresponds to their financial objective.  
  •  Fixed-rate bonds are less risky than securities bought and sold on the stock market. Bonds are popular because they can survive market volatility. As a result, investors can develop a better financial plan and link it to achieving their financial goals. 
  • These bonds are rated by credit rating companies based on how creditworthy they are. On the other side, corporate bonds have a higher level of risk. As a result, buying fixed-rate bonds guarantees that the investor will be paid both interest and principal. 

Disadvantages of fixed-rate bonds 

The disadvantages of investing in fixed-rate bonds are: 

  • Credit risk develops when the borrower cannot repay the principal and interest. The risk can be minimised by investing in highly rated fixed-income products. Moreover, fixed-rate government bonds with no default risk are an option. 
  • The ability of investors to generate attractive profits may be compromised by rising inflation. Bond prices are also indirectly correlated with interest rates. When interest rates decrease, bond prices rise, and vice versa. 
  • When the investor cannot sell the asset immediately, liquidity risk develops. These bonds tend to lack liquidity, meaning there may not be a lively market where investors can sell their investments. 

Who should invest in fixed-rate bonds? 

Investors who desire safety and have low-risk tolerance can consider fixed-rate bonds. For individuals who lack stock market experience, these bonds also serve as a long-term investment choice. Securities with fixed income have a lower risk.  

Investors with less time to recover their losses may find these assets a viable option. The inflation risk, which might result in the investments losing value over time, should be considered. Fixed-rate bonds can provide investors with a reliable source of income. The bond is suited for investors who want to achieve consistent and fixed returns over a set period.  

Growing investments over time will assist in saving for retirement or other long-term objectives. By purchasing these bonds, an investor can diversify their portfolio. 

Frequently Asked Questions

Fixed-rate children’s savings accounts allow you to store your money for a predetermined period, often between one and five years. These accounts offer a fixed rate of interest on your deposit. 

You can indeed hold multiple fixed-rate bonds. Splitting funds among accounts with various terms is one method of managing several fixed-rate bonds. 

Although most people can earn some interest on their savings without tax, fixed-rate bond interest is taxed. 

A floating rate bond has a variable coupon payment, which means that the interest rate changes depending on the benchmark rate, which is adjusted regularly. 

 Floating-rate bonds carry less interest rate risk than bonds with a fixed rate. Due to their exposure to businesses that may have financial difficulties if the economy worsens, floating-rate funds risk have more credit risk. 

A fixed-rate bond is not subject to interest rate risk, and investors can quickly determine the exact amount they will get at maturity. A floating-rate bond does not shield investors’ deposits from interest rate risk and determining the exact amount paid to investors at maturity might be difficult.  


    Read the Latest Market Journal


    Published on May 24, 2024 38 

    内容 1. 介绍 2. 成本平均法 3. 成本平均法的普及 4. 小变化大影响 介绍 在现今快速发展的世界,年轻投资者有着保障他们财务未来的各种机会。但一提到投资,却让这些年轻投资者望而却步,尤其是那些深信”投资需要大量资金”这一迷思的人来说。然而,正是这一批年轻人,通过长期的美元成本平均法投资策略,能够获得最大的收益。现在随着投资门槛的降低,并强调定期投资的重要性,让人能够以低至一美元的小金额轻松踏上积累财富的投资之旅。 成本平均法 碎股彻底改变了以美元为基础的投资概念,使投资者能够轻松拥有部分巨头公司股票。这允许年轻投资者将固定金额(如 100 新元)投资于单个股票或多个股票,入股他们喜爱的品牌,如...


    Published on May 24, 2024 19 

    经过长时间的低迷,香港市场开始回暖。恒生指数突破了约17200点的关键阻力位,暗示着投资者情绪可能出现转变。这一出色表现可能受到多种因素的推动,从战略投资决策到经济预期的改善。 我们将探讨可能导致市场复苏的具体事件,并简要分析支持性政策和外国资本流入的作用。随后,我们将审视影响投资者决策的更广泛经济环境。除此之外,许多投资者也渴望抓住潜在的投资机会;因此,我们还将深入探索香港市场中的具体股票选择,重点关注那些可能从这一乐观情绪中受益的公司。 自2021年以来,香港股市一直处于熊市,投资者信心减弱,拖累恒生指数下跌。这与中国的不确定时期相吻合,而中国是香港股市的主要驱动力。然而,最近中国市场监管机构的支持承诺带来了乐观情绪,暗示香港市场可能出现转折点。自2024年2月以来,通过香港股票连接进入中国市场的外国资金稳步增加,这也表明外国对中国市场的兴趣有所回升。 随着美国市场相对于全球市场显得越来越昂贵,许多投资机构正在战略性地调整配置,寻找价值。这一转向优先考虑被低估的市场,特别是亚洲市场。同样,越南和泰国等新兴亚洲市场也因其长期增长前景和较高的回报潜力而受到关注。 在国内,香港的宏观经济数据显示出微弱的改善,预计国内经济将继续适度复苏。在国际上,市场普遍预期美联储将在六月加息。这一潜在的举措可能会创造一个更有利的环境,使投资者撤出美国市场,转而寻找被低估的市场,从而对香港股票有利。 截至2024年4月29日,恒生指数在2024年4月转正,年初至今上涨近4%,突破了17200点的重要阻力位。下一个阻力位在18200点左右。 Figure 1: Hang Seng Index, Source: TradingView, As of...

    虎虎生威——东南亚市场复苏之路 泰国市场分析及热销股票

    Published on May 14, 2024 32 

    继前一篇我们介绍了越南市场后,接下来我们将介绍泰国市场,泰国的表现一样引人瞩目。 受结构性问题影响,相较于菲律宾、马来西亚、印度尼西亚和越南,2023年,泰国全年GDP增幅远低于其他国家。泰国2023年GDP同比2022年增长1.9%,低于市场预测的2.5%。 2023年,中国-东盟自贸协定零关税给泰国带来了直接且沉痛的打击。由于消费疲软、贸易壁垒等政策影响,产能过剩,导致大量低价进口中国商品涌入,使得2023年泰国与东盟9国的总贸易额出现了3年来的首次下滑,其总贸易额为4万亿泰铢(约1489亿新元)。由于巨大的成本价格差异,其中泰贸易逆差扩大至1.29万亿泰铢(约480亿新元)。其中,小家电、蔬果、箱包和服装行业处境最为艰难。 尽管如此,旅游业的复苏增长带动了非农业产业的增长。政府数据显示,2023年来访泰国的总人数达3.15亿人次,较去年增长40.3%。其中,国际游客超过2800万人次,马来西亚和中国为最大客源。随着泰国对中国和哈萨克斯坦实施免签政策和其他活动措施,预计2024年将带来更多游客,推动泰国旅游业的复苏进程,并力争实现2024年旅游营业收入达到3.5亿泰铢(约0.12亿新元)的目标。 热销股票 1. ADVANCED INFO SERVICE PUBLIC CO., AIS,AIS通信(ADVANC.TH) AIS通信是泰国的最大移动运营商,主要经营三大业务线,包括移动业务、AIS Fibre品牌下的高速家庭宽带业务,以及企业业务。同时AIS也提供多样化的数字生活服务。AIS通过数字智能基础设施、跨行业合作和人力资本与可持续发展这三方面,致力于“成为泰国最受尊敬的认知科技公司”的愿景。 (来源:AIS2023财年年报)...

    什么是指数差价合约? 为什么选择指数差价合约?

    Published on May 8, 2024 67 

    指数差价合约是区别于投资个股、指数期货或交易所交易基金(ETF)的一种热门替代品,因为该工具允许您获得特定指数的风险投资组合,并从柜台价格走势中获益,无论做多或做空。此外,由于差价合约的杠杆特性,交易者只需拿出合约价值的一小部分作为初始合约的抵押品即可启动一笔合约。这样,交易者就可以方便快捷地进行整个市场的交易。 本期重点摘要: 股票指数只是一组资产的集合,它概括了股市中某一行业板块的表现。许多此类指数根据不同的标准包含和/或排除某些股票。 指数差价合约有助于利用构成单一指数的各种股票分散您的投资组合、实现投资组合多样化。这也有助于避免 “选择悖论”:指数帮助您决定投资哪些股票。 最重要的是,指数差价合约让交易者获得对指数的接触,而不用购买组成指数的个股。这种具有成本效益的策略让您只需交易指数的价格变化,而无需拥有相关指数本身。 什么是股票指数? 当人们说 “今天市场上涨了 “或 “市场下跌了 “时,你会不会好奇,分析师是如何评估整个市场? 这很简单,他们只需分别将按照今天的报价和昨天的报价购买所有公司所需的金额相加。两相比较下,如果发现今天的数字大于前一天的数字,那么我们就知道今天的市场上涨了,反之亦然。然而,数字的汇总和对比可能会很繁琐和麻烦。创建指数就是为了方便测量。 因此,”股票指数 “一词指的是一组股票(或其他资产)的集合,它提供了股票市场特定部分表现的概况。该指数被用作一个替代指标,用来衡量市场在特定时间段内的涨跌情况,比如以上例子中所描述的逐日指数。...

    外汇价差合约(FX CFD)- 进阶2.0版

    Published on May 2, 2024 64 

    本文旨在为中级外汇交易者提供必要的信息和知识。它将涵盖我们上一篇文章 “五分钟看懂世界上最活跃的市场-外汇差价合约(FX CFD)...


    Published on Apr 30, 2024 38 

    解锁台湾股市的投资潜力!深入了解由强大的技术驱动型经济推动的股票市场,2023 年机械和电气设备将占出口的 69%。在政治稳定、投资者友好的法规和健全的法律框架下,探索台积电和富士康等全球顶级企业。台湾股市值得称赞的历史表现和在国际贸易中的的重要性使其更具吸引力。在这个科技实力雄厚、经济稳定、充满活力的股票市场中,抓住增长机遇!

    探索2024年通胀后的形势: 美股市场最值得关注的十大事件

    Published on Apr 30, 2024 44 



    Published on Apr 30, 2024 42 





    This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

    An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

    Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

    Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

    The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <> for more information in relation to the dividend distributions.  

    The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

    The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

    This advertisement has not been reviewed by the Monetary Authority of Singapore.  


    Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
    250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
    Tel: (65) 6230 8133 Fax: (65) 65383066