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Product overview
A wide variety of bonds and certificates of deposit are available for selection. Types of bonds for investment include government bonds, local quasi-government bonds, supranational bonds and corporate bonds. Certificates of Deposit (CDs) are issued by financial institutions such as banks. Bonds and CDs are available in major currencies including Renminbi. Tenors ranging from 1 to 10 years for bond investment and from 3 months to 3 years for CD investment are available.
Purchase in just 3 quick steps
Before beginning your investment journey
Product risk level
What is Risk Tolerance Level?
Substitute Form W-8BEN [1]
Complete the form on Invest Express Mobile App for eligible bonds issued by US corporations.
Product types
Secondary market bonds / CDs services
A wide variety of bonds and
CDs[2]are available for selection.
Product categories
Product not yet available
Key product features
Illustrations and information
What are Bonds?
Bonds are debt instruments issued by governments, corporations or other issuers to bondholders. There are various types of bonds on the market including fixed rate bonds, floating rate bonds, zero coupon bonds and convertible bonds. Bondholders are effectively lending money to the bond issuer in return for the bond issuer’s promise to pay interest regularly over the life of the bond and repayment of principal at maturity.
Hang Seng Bank currently offers bonds denominated in the major currencies issued by governments (including the PRC government, the HKSAR government), local quasi-government bodies, supranational organisations and corporations. A wide selection of bonds with different investment tenors, ranging from 1 to 10 years with various benchmark yields is also available to suit different investors’ needs.
What are Certificates of Deposit?
CD is a type of debt instrument similar to bond. CDs are issued by financial institutions such as banks. CD holders are effectively lending money to the CD issuers in return for the CD issuer’s promise to repay the principal with interest at maturity.
Hang Seng Bank offers investors with different types of CDs with various tenors and currency denominations to suit different investment objectives.
Via website
Step 1
Log on to Personal e-Banking and select “Investments” > "Bonds and CDs" > "Explore Bonds and CDs" via left menu.
Step 2
Apply filters to find your preferred bonds and CDs with different search criteria.
Step 3
A list of options will be shown, click on your preferred bond / CD, or click "Buy" to know more about the product details.
Step 4
Click "Buy"
Step 5
Enter purchase details (e.g. nominal amount) and conduct relevant suitability assessments, then click "Next".
Step 6
Verify information including product and subscription details, then click "Confirm".
Step 7
After submitting the purchase order, you may view your purchase details in "Order Status“ under “Bonds and CDs Overview” section.
Via mobile app
Step 1
Log on to Hang Seng Personal Banking mobile app and select “Investments” > "Bonds and CDs" via left menu.
Step 2
Click on the search function in the upper-right corner and enter keywords, bond / CD name or code or click on the "Quick search" options to find your preferred bonds and CDs.
Step 3
A list of options will be shown, click on your preferred bond / CD to know more about the product details.
Step 4
Click "Buy".
Step 5
Conduct relevant suitability assessments, then click "Next".
Step 6
Enter purchase details (e.g. nominal amount), then click "Next".
Step 7
Verify information including product and purchase details, then click "Confirm".
Step 8
After submitting the purchase order, you may view your purchase details in "Order Status“. Example
The trading price of a bond may fluctuate based on the prevailing market conditions (such as prevailing market rates, any change in the credit rating of the bond and the supply and demand of similar bonds in the market), and may not be in line with the expectations of bondholders.
Suppose you are subscribing an Bond with following terms:
Terms
Units
Invested Amount
USD98,000.00
Fixed Rate
98%
Coupon Rate
3% p.a.
Face value
USD 100,000.00
Maturity Date
December 15, 2018
Scenario 1: Miss. Chin holds the bond until maturity
Interest payment of 3% every year
Miss. Chin will receive an interest payment of USD3,000 (USD100,000 x 3%) every year before the maturity. On December 15, 2018, Miss. Chin will receive the final coupon payment of USD3,000 plus USD100,000 principal amount.
-
2013
US$3,000 (US$100,000x3%)
-
2014
US$3,000 (US$100,000x3%)
-
2015
US$3,000 (US$100,000x3%)
-
2016
US$3,000 (US$100,000x3%)
-
2017
US$3,000 (US$100,000x3%)
-
2018
US$3,000 (US$100,000x3%)
- Principal: USD100,000
- Total coupon payment: USD3,000 x 6 years = USD18,000
- Initial investment: USD98,000
- Profit: USD100,000 + USD18,000 – USD98,000 = USD20,000
Scenario 2: If Miss. Chin sells the bond with market price = 102%
Sells the bond with market price
If Miss. Chin sells the bond in June 2013 and the market price of the bond at that time is 102%, Miss. Chin will receive an accrued coupon payment of USD1,500 plus USD102,000 (102/100 x USD100,000) for the sale of the bond.
-
2012
Invest USD98,000
-
2013
Receive USD103,500 after redemption
- Market value when selling the bond: USD102,000
- Total coupon payment: USD3,000 x 0.5 year = USD1,500
- Initial investment: USD98,000
- Profit: USD102,000 + USD1,500 – USD98,000 = USD5,500
Scenario 3: Issuer defaults
May not receive the face value of the bond at maturity
If the issuer becomes insolvent and defaults on its obligations under the bond on or before 15 December 2015, Miss. Chin will not receive any interest amount since last coupon payment date and in the worst case, Miss. Chin may not receive the face value of the bond at maturity.
-
2012
Invest USD98,000
-
2013
US$3,000 (US$100,000x3%)
-
2014
US$3,000 (US$100,000x3%)
-
2015
Issuer defaults
- Face value: USD0 (Assume no recovery value) Investors will not be able to collect the coupon or principal as scheduled
- Total coupon payment: USD3,000 x 2 years = USD6,000
- Initial investment: USD98,000
- Loss: USD98,000 – USD6,000 = USD92,000
Terminology
Issuer
This is the party that borrows the money. Bonds are commonly classified by the nature of their issuer, for example, corporate bonds (issued by companies or their subsidiaries), government bonds (such as Exchange Fund Notes issued by the Hong Kong Monetary Authority), and bonds issued by supranational organisations (like the World Bank).
Principal
This is also called the par value or face value. It is the amount repaid to the bondholder when the bond matures.
Coupon rate
This is the rate at which the issuer pays interest on the principal to the bondholder each year. Interest payments are normally made at regular intervals, e.g. annually, semi-annually, quarterly. For Certificate of Deposit, the interest payment is usually paid at maturity. The coupon rate can be fixed, where it does not change over the term of the bond. It can be floating, where it is reset periodically according to a predetermined benchmark, such as HIBOR plus a spread. The coupon rate can even be zero. A zero-coupon bond is usually sold at a price below its principal. The bondholder's return is then the difference between the purchase price and the principal repaid on maturity.
Coupon Frequency
The regular intervals that interest payments are normally made, e.g. annually, semi-annually, quarterly.
Term
This is the life of the bond, i.e. the period (usually a number of years) over which the issuer has promised to meet its obligations under the bond. Some bonds can be "perpetual" in the sense that they do not have a fixed maturity date.
Guarantor
Some bonds are guaranteed by a third party called a guarantor. If the issuer defaults, the guarantor agrees to repay the principal and/or interest to the bondholder.
Maturity date
Bondholder will receive the principal and accrued interest on this date.
Bond yields
Bond yield is the amount of return an investor realises on a bond. There are several types of bond yield measures. Actual yield of bonds will depend on the subscription or purchase price and may be higher or lower than the specified coupon rate. Current yield, yield to maturity (YTM), and yield to call (YTC) are the three commonly used bond yield measures.
Current yield
The annualised rate of return calculated by simply dividing the current annual coupon of a bond by its price.
Yield to maturity
The rate of return anticipated on a bond if it is held until maturity. YTM is usually expressed as an annual rate of return.
Yield to call
The rate of return of a callable bond which is held until the call date. The yield will only become valid if the bond is called before maturity.
To learn more about Bonds, please visit "The Chin Family" website
Knowledge and insights
Winning through stability –
Bond investment and volatile markets
Bond & FX Flows (Cantonese version)
Latest market focus – Bonds (Cantonese Version)
Bonds market sector focus
Bonds market outlook
Financial breakfast (Cantonese version)
Open a securities account
New to Hang Seng Bank
Open a bank account and investment
account with Hang Seng Personal Banking Mobile App[7]
Existing integrated account holders
Comprehensive Bonds/CDs Investments
experience is just a few steps away[8]
Non-integrated account holders
Open an Integrated Account at designated branches and activate your investment account via Personal e-Banking
Footnote
Other point(s) to note
- For label meaning on bonds / CDs, please refer to below list.
PI - Professional InvestorsWMC - Cross-boundary Wealth Management Connect[6]
ESG - Environmental, Social and Governance[4]
Comm - Communication Services
Condis - Consumer Discretionary
Constp - Consumer Staples
Div - Diversified
En - Energy
Fin - Financials
Go - Government
Health - Health care
Ind - Industrials
Mat - Materials
RE - Real Estate
Tech - Technology
Util - Utilities
Remark(s)
- For Joint accounts, all non-US account holders need to maintain a valid US IRS W-8BEN Form with the Bank and the W-8BEN Form will be subject to regular review. Customer can visit the US IRS website to download the US IRS W-8BEN Form and for instructions on completing the Form. If you would like to know more about the W-8BEN Form, please consult your professional adviser including but not limited to tax adviser. We cannot provide you with any legal and/or tax advice.
- Types of bonds for investment include government bonds, local quasi-government bonds, supranational bonds and corporate bonds. Certificates of Deposit (CDs) issued by financial institutions such as banks are also available.
- Businesses and projects that promote the transition to low-carbon, climate resilient and sustainable economy and provide clear environmental sustainability benefits, providing another investment angle instead of traditional financial gauges.
- There are no standardized definitions of ESG products that are established in the market. (The Bank) relies on external third party’s information when assessing ESG classification for products and the source of information is based on sources that the Bank believe is reliable. The Bank may not be able to provide the update of ESG classification in a timely manner. The ESG indicator is for general information and reference only, and is not nor is it intended to be a solicitation, recommendation or advice on any bonds / CDs. Investors should note that all investments involve risks (including the possibility of loss of the capital invested), prices of bond / CD may go up as well as down and past performance information presented is not indicative of future performance. Investors should read carefully and understand the relevant bond's / CD's offering documents (including the bond / CD details and full text of the risk factors stated therein) before making any investment decision.
- Tenors ranging from 1 to 10 years for bond investments are available. Characteristics of these eligible bonds include: low-to-medium risk level, non-complex bond and investment grade.
- We allow eligible investors to purchase bonds / CDs which are available in major currencies (including Renminbi) and tenors ranging from 1 to 10 years.
Characteristics of these eligible bonds / CDs include:
- Low-to-medium risk level
- Non-complex structure
- Government and Corporate Bonds
For details, please view our [eligible retail bond list] for Southbound Service or call our Cross-boundary WMC hotlines at (852) 2912 3456 (Hong Kong) or (86) 4001 20 3456 (Mainland).
Hotlines details:
Applicable to Hong Kong and Mainland:
Office hour of Cross-boundary WMC Hotline is Monday to Friday, 9 a.m. to 6 p.m., except weekend and Hong Kong Public Holiday.
Applicable to Mainland:
The toll-free enquiry hotline allows you to contact us for free even while staying on the Mainland. The toll-free hotline can be accessed from mobile lines, fixed telephone lines, payphones and call cards and is free of IDD charges.
Please contact the relevant service supplier for details. Customer agrees to be bound by the terms and conditions for the service provided by service providers, which may be amended from time to time. For any claims, disputes and complaints regarding such service and information, customer should refer directly to service providers. Hang Seng Bank Limited (Hang Seng Hong Kong) assumes no responsibilities for such service. - You can open a bank account online with your mobile phone only if you do not hold any of the following Hang Seng Bank accounts, including but not limited to:
- Savings / Current Account (including passbook and statement savings account)
- Integrated Account
- Credit Card Account
- Business Account
- Joint-named Account
- Mortgage Plan
- Safe Deposit Box Services
- Aged over 18 and under 65
- A permanent Hong Kong resident
- Not a US citizen or tax resident
- Residing in Hong Kong (with current residential and correspondence address(es) in Hong Kong)
- Currently located in Hong Kong
- Integrated account is referring to the following accounts:
- Prestige Banking
- Preferred Banking
- Green Banking
- Integrated Account
- M.I. Kid Asset Builder Account
- Prestige Banking