Frequently Asked Questions

What accounts do I need for bonds investment?

You will need a trading account with DBS Vickers Securities for bonds investments with us.

In addition, if you are investing in Singapore Government Bonds, you will need the following accounts:

What is a bond?

It is a long-term debt security, issued by a corporation or government, with a fixed interest rate and maturity date where interests and principal must be paid.

Factors you should consider before investing in bonds

1. Investment horizon and investment objective
   
   

   You will need to decide on your investment horizon; generally the longer the period of investment the higher the return. Your choice of maturity will depend on when you need the cash and the amount of risk you are willing to take. Generally, the longer tenor bonds are more sensitive to interest rates movement and you may potentially make greater capital gains or losses if you liquidate your bond investments before the maturity date.

   Bonds are a good instrument if your investment objectives are to:

   • Diversify your portfolio
   • Earn potentially higher return than fixed deposits
   • Enjoy a safe investment and earn regular interest income

2. Yield to maturity
   
   

   This is the expected return that you can earn if you hold your bond investment till maturity. It is most commonly used to measure the value of a bond.

3. Risk
   
   

   Credit Risk:	associated with bond issuer, and refers to the ability of the issuer to meet its obligations (coupon & principal) as they fall due
   Market Risk:	arises from the fluctuation on bond prices due to movement in interest rates
   Liquidity Risk:	arises from the ability to sell the bond in the secondary market at market price