Fixed Rate Bond

When you invest in fixed rate bonds, you receive regular interest payments on a quarterly, semi-annual or annual basis, depending on the terms of the bonds, opening the door to potential wealth growth.

Illustrative Examples

January 2010

Miss Lee invested US$235,000 in a US Treasury Bond at the market price of 94% on 15 January 2010. The face value of the bond was US$250,000. Details are as follow:

Face Value Coupon Rate (p.a.) Maturity Date
US$250,000 6% 15 January 2019

Before the maturity date, Miss Lee will receive an interest payment every year as below:
US$250,000 x 6% p.a.
= US$15,000

July 2013

Scenario 1: Sell the Bonds Before Maturity
If Miss Lee decided to sell the above bond in July 2013, and the market price of the bond at the time was 119%, she would have received a pro-rated interest payment of US$37,500, as well as US$297,500 for selling it.

Total Return in This Situation:
US$250,000 face value x (119%-94%) + pro-rated interest payment
= US$62,500 + (US$15,000 x 2.5 Years)
= US$100,000

January 2019

Scenario 2: Hold the Bonds Until Maturity
At maturity (15 January 2019), Miss Lee will receive the final interest of US$15,000 plus the face value of US$250,000 from the bond issuer:
US$15,000 + US$250,000 = US$265,000

Total return for the whole investment period:
US$250,000 x 6%p.a. x 9 years
= US$135,000.




Risk Disclosure Statement


The above is an illustration example and only for the ease of your understanding of our products. The actual amount shall depend on the actual amount of investment involved.

The information contained on this page is for reference only. Shanghai Commercial Bank ("the Bank") makes no warranty as to the accuracy or completeness of the information provided herein. It constitutes neither a solicitation nor an offer with respect to the purchase or sale of any security. Bond investments are not bank deposits and involve risks, including the possible loss of the principal amount invested. Investors in bonds denominated in non-local currency should be aware of the risk of exchange rate fluctuations, which may cause a loss of principal. Unless specified, these investments are not obligations of or guaranteed by the Bank. This investment service is not open to US citizens. Bond prices may go down as well as up. The Bank accepts no liability for any direct or consequential loss arising from use of this website. The Bank does not guarantee the existence of a secondary market for bonds.


Important Notes

  • This webpage has not been reviewed by the Securities and Futures Commission or any other regulatory authorities in Hong Kong.
  • This is an investment product. The decision to invest is yours but you should not invest in bonds unless the intermediary selling them has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.
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