Enjoy a steady stream of passive income

Enjoy a steady stream of passive income

Build a more diversified portfolio
and reduce risk concentration in a single asset class
Enjoy higher yields
than bank deposits

What are bonds?

Bonds are debt securities issued by a borrower with ­fixed interest payments that provide higher rates than bank deposits. These fixed interest payments are known as coupons, and are typically paid on a semi-annual basis. When the bond reaches maturity, the notional investment sum is returned to the investor. You’ll find a wide variety of bonds issued by governments, quasi-government institutions and corporations globally. OCBC offers a variety of bonds, from developed markets as well as from emerging markets.

What types of bonds are there?

Investment grade bond

A bond is considered investment grade if it receives a credit rating of ‘BBB- or higher’ by Standard & Poor’s, or ‘Baa3 or higher’ by Moody’s. In general, investment grade bonds are judged by the rating agency as likely enough to meet payment obligations.

High yield bonds

Bonds that are not rated as investment grade (non-investment grade) are known as high yield bonds.

Why invest in bonds?

An essential and core allocation to a diversified investment portfolio, bonds make a great addition for investors who desire to earn a steady stream of passive income. If you have fixed payment outflows, investing in bonds will give you the security to service these payments.

You’ll enjoy:

Higher yields than bank deposits

Steady passive income from periodic interest payments

A more diversified portfolio

A wide range of bonds to choose from

Things to consider when investing in bonds:


Tolerance for a certain level of risk, as coupon payments and the return of principal amounts are not guaranteed


An understanding of the terms and conditions attached to the bond


The impact a bond would have on your overall portfolio


Economic changes and other factors that may affect the issuer or bond


An investor may lose all or a substantial part of the investment if a bond issuer defaults on payments


Bond prices have an inverse relationship with interest rates – higher interest rates would result in lower bond prices and vice-versa