A bond is a debt instrument, issued by government, large corporation or other entities to raise capital. The issuer promises to pay a specified rate of interest regularly and to repay the redemption value of the bond when it matures.
By Bond Issuers
By Coupon Rates
Bond prices will fluctuate based on the issuer's credit ratings assigned by international rating companies. Moreover, the bond price and the yield move in opposite direction. When the bond price increases, the yield drops, or when the bond price drops, the yield increases. In general, bond yield and interest rate move in the same direction.
USD98,000 (market price of USD98.00 per unit)
Average Interest Rate
Interest payment annually: USD100,000 x 4% = USD4,000
At maturity, the Face Value returned:
USD100,000 - USD98,000 = USD2,000
The average interest rate after 3 years:
(((USD4,000 x 3 + USD2,000) / 3) / USD98,000) x 100%
How should I choose a bond?
Should I choose a bond with the highest coupon rate?
|*||Yield-to-maturity is the annualized return on a bond, assuming you hold the bond to date of maturity. For bonds with similar terms and credit ratings, the higher the yield, the more attractive the bond.|
Simply open an investment account with Fubon Bank for bonds trading, you can enjoy the following privileges:
For details, please visit any Fubon Bank branch or call our Integrated Customer Service Hotline at 2566 8181 (Press 3 after language selection) during office hours*.
*Monday to Friday: 9am to 7pm; Saturday: 9am to 1pm (Except public holidays).
Terms and Conditions
Risk Disclosure Statements:
The following risk disclosure statements do not disclose all the risks involved in this product. You should carefully consider whether trading or investment is suitable in light of your financial needs and investment objectives. You should not rely on this information alone to make any investment decision, but should read in detail the relevant product offering documents and risks disclosure statements or seek independent professional advice if in doubt.
Bond investments are not bank deposits and involve risks, including the possible loss of the principal amount invested. Bond prices may go down as well as up, and may even become valueless. It is as likely that losses may be incurred rather than profit made as a result of buying and selling bonds.
Bonds are subject to issuer defaulting on its obligations, you may not be able to receive back the principal and interest. Credit ratings assigned by credit rating agencies do not guarantee the creditworthiness of the issuer. Bonds are typically more susceptible to fluctuations in interest rates and generally prices of bonds will fall when interest rates rise. As bonds may not have active secondary markets and it may be difficult or impossible for investors to sell the bonds before its maturity. Even you can successfully sell the bonds before maturity, you may receive an amount lower than the original investment amount. If you invest in foreign currency bonds, you may be subject to the risk of exchange rate fluctuations and may incur loss if you convert the funds to local currency when there is devaluation in foreign currency. If a bond is early redeemed and you reinvest the funds in similar bonds, your return may be substantially reduced.
Beware of Tax Obligations When Investing Overseas:Since overseas investments may involve extra tax implications, investor should seek tax advice where appropriate. For example, the US tax regime covers everyone holding US-based investments (be it marketable securities, mutual funds, or bonds, etc) in his/her own name, regardless of whether the person is a US citizen or permanent resident (so-called green-card holder).