Retail investors can now invest in a sustainability-linked structured deposit, the first of its kind in Singapore, offered by OCBC Bank.

For a minimum investment amount of S$5,000 (cash or Supplementary Retirement Scheme funds), retail investors can invest into the six-year callable Structured Deposit which pays a fixed interest rate of 1.20% per annum for the first three years and 1.25% per annum for the following three years. The principal on this structured deposit is fully protected if held to maturity.

The launch of this structured deposit adds to the diversity of the suite of sustainability-linked investments which OCBC Bank customers can make. The Bank offers a wide range of sustainability-linked investment products including life insurance, unit trusts, as well as equities and ETFs portfolios on OCBC RoboInvest.

Customers who are keen to invest in the structured deposit can do so at any OCBC Bank branch or through their relationship manager.

A structured deposit is a financial instrument which combines a deposit with an investment product. The structured deposit monies placed by customers will be invested in notes, bonds or other fixed income securities issued by companies that meet the Bank’s Environment, Social and Governance (ESG) criteria.

These companies use the funds from these ESG-related securities to support sustainability-related projects in areas such as low-carbon transportation, energy efficiency, sustainable water/waste management and green buildings according to the Bank’s Green Financing Framework. The Green Financing Framework is aligned with the Green Bond Principles 2021 published by the International Capital Markets Association and the Green Loans Principles 2021 published by the Loan Market Association.  

Globally, studies have estimated that there is a US$2.5 trillion gap in sustainable financing each year. In South-east Asia, this number is estimated to be about US$160 billion.

Mr Kenneth Lai, Head of Global Treasury at OCBC Bank, said: “There is a lot more that banks can do to drive sustainability and we are looking at more ways to provide and promote to our clients solutions and investment products relating to sustainability. This structured deposit gives our customers a chance to invest in a meaningful product and signal their desire to contribute to a more sustainable world.”

OCBC has been leading the way in coming up with innovative sustainable financing products. Earlier this year, it executed a sustainability-linked swap, which was a step-down instead of the usual penalty-laden step-up.  It also launched an A$500 million senior green bond – the first Singaporean bank to have executed repeat green or ESG bonds past the first issuance.