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Accredited Investor

An Accredited Investor is an individual:

1. Whose net personal assets exceed in value SGD 2 million (or it's equivalent in a foreign currency) with value of his/her primary residence capped at SGD 1 million, or

2. Whose financial assets (net of any related liabilities) exceed in value SGD 1 million (or it's equivalent in a foreign currency), or

3. Whose income in the preceding 12 months is not less than SGD 300,000 (or it's equivalent in a foreign currency)

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Kristal Freedom Account Fees and Charges

If account value is less than USD 50,000 -

NIL (if 25 or less client-initiated trade per calendar year; every SIP initiation is considered as 1 buy), else Custody and Asset Operating Fees at actuals charged to the Account by the Partner broker (i.e. Saxo Capital Markets).

If account value is more than USD 50,000 -

0.3% of account value charge is applicable, computed monthly on calendar month-end account value, charged quarterly and Custody and Asset Operating Fees at actuals charged to the Account by the Partner broker (i.e. Saxo Capital Markets).

Kristal Freedom Account Fund Movement Fee

Fee Item Kristal Freedom Account
Funds Deposit
USD Upto USD 25
SGD NIL
HKD NIL
AUD Upto USD 250
EUR Upto USD 250
GBP Upto USD 250
Deposit Threshold NIL (USD 1000 recommended)
Funds Withdrawal
USD Upto USD 50
SGD NIL
HKD NIL

FX Conversion

Where required shall be executed at 0.05% from the Market Rate. The Market Rate available to Kristal.AI is the Rate made available by the relevant brokers.

Note -

If Sender indicates Sender charges = 0, sending cost will be deducted (in addition to the above) by the receiving bank and paid back to the Sending bank and/or its Correspondent bank as applicable.

Additional charges levied by Clients’ bank may apply on transfers and FX conversions done in Clients’ bank account.

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Kristal Private Wealth Account Fees and Charges

Non Fund Kristal account value if less than USD 50,000 -

Custody and Brokerage at actuals, charged to the Account by the Broker (i.e. Saxo Capital, Interactive Brokers).

Non Fund Kristal Account value if greater than USD 50,000 -

- 0.30%p.a. of A/C value > US $50,000, computed MONTHLY on calendar month-end account value, charged QUARTERLY.

- Custody and Brokerage at actuals, charged to the Account by the Broker (i.e. Saxo Capital, Interactive Brokers).

Fund Kristal fee in accordance with Factsheet.

Fee Item Kristal Private Wealth Account
Funds Deposit
USD Upto USD 50
SGD NIL
HKD N/A
AUD Upto USD 250
EUR Upto USD 250
GBP Upto USD 250
Deposit Threshold NIL (USD 25000 recommended)
Funds Withdrawal
USD Upto USD 50
SGD NIL
HKD NIL

FX Conversion

Where required shall be executed at 0.05% from the Market Rate. The Market Rate available to Kristal.AI is the Rate made available by the relevant brokers.

Note -

If Sender indicates Sender charges = 0, sending cost will be deducted (in addition to the above) by the receiving bank and paid back to the Sending bank and/or its Correspondent bank as applicable.

Additional charges levied by Clients’ bank may apply on transfers and FX conversions done in Clients’ bank account.

Kristal Managed Investment Account Fees and Charges

Fixed Income account value is equal to or greater than 80% of Total account value -

0.20%p.a. of Total account value, computed MONTHLY on calendar month-end Total account value, charged QUARTERLY.

Fixed Income account value is less than 80% of Total account value -

0.50%p.a. of Total account value, charged QUARTERLY, computed MONTHLY on calendar month-end Total account value.

Brokerage Account operating and maintenance charges ADDITIONAL in accordance with your Agreement with Broker.

Money transfer and FX conversion charges in accordance with your agreement with Broker.

DISCLAIMER

This is offered only to Accredited and Institutional Investors as defined under the Securities and Futures Act, Chapter 289 of Singapore (“Act”), which broadly comprises of regulated financial institutions, large corporates, high net worth individuals and sophisticated investors.

By clicking “Proceed”, you confirm that you are an Accredited/Institutional Investor as defined under the Act and you agree to the Terms of Use for this website.

EXIT PROCEED

Different Types of Bonds: What to Know Before Investing

Updated on 23 Mar 2020

Bond investments are known for being stable, secure investments. But there are many to choose from. Let us demystify the jargon for you!

Introduction
What are the different types of bonds?
Treasury Bonds
U.S. Government Bonds
Investment-Grade Corporate Bonds
Junk Bonds
Foreign Bonds
Municipal Bonds
Mortgage-backed Bonds

Introduction

Bonds are fixed-income securities or debt instruments. When you purchase a bond, you are giving out a loan to the bond’s issuer, who pays you interest for the use of your money. Bonds constitute a popular method of long-term investment, with a guarantee for maximum returns with minimum risks in the future.

Bonds are different from stocks –as they are sold by corporations, the government or its sponsored agencies, cities, states, and other public authorities. Bonds also come in several categories – from short-term notes to bonds that take 20 to 30 years to mature.

Let us go through the different types of bonds and what you need to know before investing your money in them.

 

What are the different types of bonds?

Bonds available in the market are:

1) Treasury Bonds
2) Other U.S. Government Bonds
3) Investment-Grade Corporate Bonds
4) Junk Bonds
5) Foreign Bonds
6) Municipal bonds
7) Mortgage-backed bonds

Almost all of these bonds in the U.S. fall into one of three categories, based on the risk factor involved.

  • High Risk- These are rather high-risk bonds, sold by corporations, cities, and states. Those bonds are called Below-Investment-Grade, or Junk Bonds.
  • Medium Risk- These are the low-risk bonds sold by corporations, cities, and states; these are known as “Investment Grade.”
  • Low Risk- This category consists of the extremely safe debt of the federal government and its agencies. Ex. Treasury Bonds and US Government Bonds.

Let us now discuss these bonds one by one, so that you can have an idea as to which bond aligns with your investment situation along with the risks involved in the various bonds.

 

Treasury Bonds

Treasury bonds are U.S. government debt securities. They have a maturity range between 10 and 30 years and a fixed interest rate. They pay semiannual interest payments until maturity, at which point the face value of the bond is paid to the owner. Such bonds are generally included in the portfolio to reduce portfolio risk.

The interest payments on these bonds are exempt from both state and federal taxation. The return on most T-bonds is tied to the 5-year Treasury rate. Young investors gain from Treasury Bonds, depending on their age at the time of buying them.

 

U.S. Government Bonds

These include the US Government Savings Bonds, and Agency bonds issued by federal agencies, like Fannie Mae or the Federal National Mortgage Association and Ginnie Mae from the Government National Mortgage Association. They promise a guaranteed fixed rate of return adjustment for inflation.

Series EE Savings Bonds are free from State and Local income taxes. Series EE savings bonds are capable of paying interest up to 30 years from the date of issue.

 

Investment-Grade Corporate Bonds

These are the High-grade Bonds that receive higher ratings by the credit rating agencies, like bonds rated BAA (by Moody’s) or BBB (by Standard & Poor and Fitch) or above.

These bonds tend to be issued at lower yields than other bonds. These bonds have a lower defaulting risk. They are from companies with higher repayment capabilities.

 

Junk Bonds

These are the bonds that have been given lower Credit ratings like “BB,” “B,” “CCC,” etc. by the credit rating agencies.

They come under the Low Credit Quality category. Companies with these ratings fall under the “speculative grade”. They are more prone to changing economic conditions.

 

Foreign Bonds

A foreign bond is a bond issued in the domestic market by a foreign company or organization, as a means of raising capital. This bond is issued in the domestic market’s currency. Ex. Bulldog Bond in the UK, Samurai bond in Japan, and Kangaroo Bond in Australia.

Foreign bonds have higher yields than domestic bonds. They involve greater risks and face repayment risk. You can add foreign content to your investment portfolios with these bonds, without the added exchange rate exposure. The fixed interest payments and principal payments are in another currency.

The value of these payments when they are converted into dollars depends on the currency exchange rates.

 

Municipal Bonds

These bonds are also known as “munis”. They are issued by the U.S. states and local governments or their agencies.
They come in both the investment-grade and high-yield bond varieties. They are generally used to finance public projects such as roads, schools, airports, etc.

The interest on these bonds is tax-free. Taxable yields are higher than muni yields to compensate investors for the taxes.

 

Mortgage-backed Bonds

A mortgage bond is a bond secured by a mortgage or group of mortgages. These bonds are backed by real estate holdings.

In case of default, mortgage bondholders have a claim to the underlying property and could sell it off to compensate.
Mortgage bonds are safer than corporate bonds. They have a lower rate of return. Mortgage bonds offer investor protection because the principal is secured by a mortgage.

Investors can buy bonds in small quantities and use them to diversify their holdings. A diversified bond portfolio can provide decent yields with lower risk levels than equities. They also provide a higher income than money market funds or bank deposits.

Disclaimer

The materials and data contained herein are for information only and shall in no event be construed as an offer to purchase or sell or the solicitation of an offer to purchase or sell any securities in any jurisdiction. Kristal Advisors does not make any representation, undertaking, warranty or guarantee as to the update, completeness, correctness, reliability or accuracy of the materials and data herein. All opinions, forecasts or estimation expressed herein are subject to change without prior notice. Kristal Advisors and its affiliates accept no liability or responsibility whatsoever for any direct or consequential loss and/or damages arising out of or in relation to any use of opinions, forecasts, materials and data contained herein or otherwise arising in connection therewith.

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