Fixed income securities are investments that give you fixed income, in the form of payouts at regular intervals for the whole period of the investment, and on maturity also give you back the invested amount. Simply put, the initial sum that you gave ( lent out) will be returned to you, and till that amount is returned, you get paid an interest for having lent that money.
Types of Fixed Income Securities
Fixed income securities include-
GICs- Guaranteed investment certificates
Strip coupons and residuals
Private corporations, governments and financial institutions issue fixed income securities and by and large these instruments come with a fixed term and a fixed rate of interest. However, there are also arrangements where monies can taken back before the term period at no loss or on paying a penalty.
It would surprise any market watcher to know that fixed income securities are very popular in the Singaporean market even today, despite their reputation of relative low yields and the average Singaporen investor’s liking for quick money and quick returns. The intrinsic benefits of the fixed income security instrument makes it a favorite with anyone who want’s to reduce their risk and still earn.
The safe bet factor– The return of the capital, with regular payments throughout the term, have always been the biggest benefits of the fixed income security mode. All the bond buyer has to do is to retain the bond, claim the regular benefits, paid annually or half yearly, and present the bond on maturity. It’s a guaranteed return that few others in the league, can boast of.
The fixed income guarantee– As instruments that offer regular payouts, it helps in a big way by letting you organize your finance. No matter what happens, on the fixed day, your regular income is going to come in and you can plan likewise, greatly improving your cash flow management.
Fixed income securities offer the necessary diversity to the portfolio and act as a counter balance for higher risk investments, which is why they are so popular even with investors who primarily target big returns.
Depending on your specific need, you can opt for fixed income security instruments that can be less liquid or more liquid, giving you the flexibility to covert the instrument into cash on a short notice.
Citibank Singapore offers Bonds and Structured notes in its fixed income securities offerings and you can have someone call you to explain the details by filling in your info at the website;it is as simple as that. DBS, Phillip Securities, OCBC etc. are other known names that offer fixed income securities in the Singaporean market.