Invest FAQs – Help Centre – Standard Chartered Malaysia

Bond Investment

Who are bonds suitable for?

Low-risk investment

this is especially true for government bonds and high-grade corporate bonds

Regular cash payout

through coupon payments made annually, semi-annually or quarterly

Potentially higher interest rates

compared to Fixed Deposit rates

Capital appreciation opportunity

in addition to regular cash payouts

Investment diversification

to balance out higher-risk asset classes in your portfolio

What does buying a bond in the secondary market mean?

Aside from purchasing new issue bonds from the issuer, you can also purchase bonds that are already in the market. This is known as purchasing bonds from the secondary market. The price you will be required to pay would be the accrued interest on the bond as well as its market value.

Example:

Investor A buys a bond in the primary market with a face value of MYR1,000 and a coupon of 5%. After 90 days, Investor A sells the bond to Investor B at the market price of MYR950.

Investor B would have to pay:
Market value of bond + accrued interest of bond over 90 days
= MYR950 + (MYR1,000 x 5% x 90/365)
= MYR950 + MYR12.33
= MYR962.33 is the amount Investor B pays Investor A when he purchases the bond from the secondary market

How can I invest in bonds through Standard Chartered?

While our Investment Services offer a variety of bond funds, we also offer you the opportunity to access different types of bonds in the market.

Standard Chartered allows you the freedom to choose the bonds of your choice from our comprehensive range offered, to help diversify your investment portfolio.

What types of bonds are on offer?

Government Securities	They include Malaysian Government Securities (MGS) and Malaysian Treasury Bills issued by the Malaysian Government to raise funds.
Zero-Coupon Bonds	These bonds do not have coupon payouts but are instead sold at a discounted value, with the face value payable at maturity date.
Corporate Bonds	These are debt securities issued by corporations and offer coupon payouts with a fixed maturity date.
Floating-Rate Notes	These bonds have a variable coupon, usually dependent on a money market reference rate e.g. LIBOR (London Inter-Bank Offered Rate), plus a fixed spread.
Commercial Papers	These unsecured money market securities are usually short term in nature and issued by corporations with excellent debt ratings.
Certificate of Deposit	Issued by banks or financial institutions that is interest-bearing and short term in nature.
Subordinated Bonds	These typically offer a higher rate of return as they have lower priority compared to other bonds in the case of liquidation or bankruptcy of the corporation.
Convertible Bonds	This hybrid security has debt and equity-like features and can be converted into equity in the issuing company at an agreed upon price.
Islamic Debt Securities	These debt securities are corporate bonds that are Shariah compliant.
Inflation Indexed / Protected Securities	The principal amounts of these bonds are indexed to inflation, thereby reducing the inflation risk of the investment.

Government Securities	They include Malaysian Government Securities (MGS) and Malaysian Treasury Bills issued by the Malaysian Government to raise funds.
Zero-Coupon Bonds	These bonds do not have coupon payouts but are instead sold at a discounted value, with the face value payable at maturity date.
Corporate Bonds	These are debt securities issued by corporations and offer coupon payouts with a fixed maturity date.
Floating-Rate Notes	These bonds have a variable coupon, usually dependent on a money market reference rate e.g. LIBOR (London Inter-Bank Offered Rate), plus a fixed spread.
Commercial Papers	These unsecured money market securities are usually short term in nature and issued by corporations with excellent debt ratings.
Certificate of Deposit	Issued by banks or financial institutions that is interest-bearing and short term in nature.
Subordinated Bonds	These typically offer a higher rate of return as they have lower priority compared to other bonds in the case of liquidation or bankruptcy of the corporation.
Convertible Bonds	This hybrid security has debt and equity-like features and can be converted into equity in the issuing company at an agreed upon price.
Islamic Debt Securities	These debt securities are corporate bonds that are Shariah compliant.
Inflation Indexed / Protected Securities	The principal amounts of these bonds are indexed to inflation, thereby reducing the inflation risk of the investment.

What to look out for when choosing your bond?

Credit risk or default risk
You should select a bond that is issued by a credible issuer to ensure that full and timely repayments can be made to you. If the bond issuer is unable to make interest or principal payments when due, as per the bond agreement, the issuer is said to be in default, and the investors may not recover their full investment capital.
Interest rate risk
Bond prices have the tendency to move inversely with interest rates. This may have an effect on your investment, due to the rise and fall of the bond price, should you decide to sell the bond before its maturity.
Liquidity risk
Each and every bond comes with a maturity date. You will need to be prepared to hold the bond till maturity. However, should you need to liquidate your investment at short notice you may experience difficulty in finding a buyer and may therefore have to sell at an unfavourable price.
Currency risk
With global bonds, you need to be aware of your exposure to currency risk. This is the possibility that the value of the investment may be adversely affected by currency fluctuation movements through a devaluation of the base currency versus the reference currency, resulting in potential losses.

Foreign Currency Deposits

How do I know the interest rate offered on my Foreign Currency Deposit Account?

Foreign Currency Deposit Account interest rates are dependent on market rates and could fluctuate from day to day. Please check with your nearest branch or contact your RM for the latest Foreign Currency Deposit Account interest rate.

If a Foreign Currency Deposit Account offers interest, how is the interest rate calculated on a Foreign Currency Deposit Account?

Calculation of the daily interest rate on Foreign Currency Deposit Account is as follows: (Available balance x Interest Rate)/365

Who is classified as a resident or a non-resident?

A resident is classified as:

A citizen of Malaysia, excluding person with PR abroad who lives abroad
A non-citizen of Malaysia who has obtained PR and resides in Malaysia

A non-resident is classified as:

Any person other than a resident
A Malaysian citizen with PR abroad who lives abroad

Are there any restrictions when you open a Foreign Currency Deposit?

No, there are no restrictions. Residents and non-residents are free to open Foreign Currency Deposit for any purpose.

What are the benefits of opening a Standard Chartered Foreign Currency Deposit?

Save on foreign exchange losses that would arise from the exchange conversion process
Get preferential forex rates from our dedicated Retail Treasury Desk Dealers
Earn attractive interest rates on your deposits
Flexible placement tenures for placing your funds

How do I open a Foreign Currency Deposit?

The same procedure will apply as opening a normal savings or fixed deposit account. However, in order to open a Foreign Currency Fixed Deposit Account, you must first open a Foreign Currency Savings Account.

What is the minimum deposit amount required to open a Foreign Currency Deposit?

A minimum deposit of USD10,000 or its equivalent is required to open a Foreign Currency Savings Account or a Foreign Currency Fixed Deposit Account.

Are there any restrictions to open a joint Foreign Currency Deposit?

No, there are no restrictions to open a joint Foreign Currency Deposit following the latest liberalisation by Bank Negara Malaysia effective 1 April 2007.

How can I withdraw from my Foreign Currency Deposit?

You may withdraw either by converting to a MYR account, telegraphic transfers or bank drafts.

Are there any charges imposed on the Foreign Currency Deposits?

There is no charge for opening a Foreign Currency Deposit. However, a monthly service charge of USD10 or its equivalent will apply to Foreign Currency Savings Account whenever the monthly average credit balance falls below USD10,000 or its equivalent for all currencies.

Is there any penalty charged for early upliftment of Foreign Currency Fixed Deposits?

Yes, a penalty will be charged for any early upliftment of Foreign Currency Fixed Deposit.

No partial upliftment is allowed. Any early upliftment is subjected to penalty charges as below:

Total penalty = interest accrued + handling fee + replacement cost

Note:
Handling fee is USD50 (or equivalent)
Replacement cost = (current market day rate - contract rate) x remaining days to maturity

The replacement cost can be zero if the current market rate at the date of the premature upliftment is less than the deposit contract rate.

Commodity-Linked Structured Investment

What is Commodity-Linked Structured Investment (COMLSI) ?

Commodity-Linked Structured Investment is a dual investment involving both USD and gold. This investment is non-principal protected, but it offers the investor the opportunity for potentially higher returns.

Who can invest in COMLSI?

Residents

Citizen of Malaysia, excluding those with foreign PR and who resides abroad
Non-citizen of Malaysia who has obtained PR status in Malaysia and resides permanently in Malaysia
Persons, whether body corporate or unincorporated, registered or approved by any authority in Malaysia

Non residents

Any person other than a resident
A Malaysian citizen with PR abroad who lives abroad

What is the minimum age to invest in COMLSI?

An investor must be at least 21 years of age and above to be eligible to invest in COMLSI.

Are there any restrictions to opening a COMLSI Account?

A minimum investment of MYR 50,000* must be placed for any Commodity-Linked Structured Investment deal.

Other Terms and Conditions apply.

This product is made available only to individuals with (1) net personal assets exceeding RM3million or its equivalent in foreign currencies, (2) gross annual income exceeding RM300,000 p.a. or its equivalent in foreign currencies, (3) total net joint assets with spouse exceeding RM3million or its equivalent in foreign currency excluding the value of their primary residence, (4) total joint gross annual income with spouse exceeding RM400,000 p.a. or its equivalent in foreign currencies; OR corporate/partnership that has total net assets exceeding RM10million or its equivalent in foreign currency as at the last day of that financial year.

*The minimum investment amount is RM50,000 (SCB's requirement).

What are the benefits of opening a COMLSI Account?

Potential to reap the benefits associated with gold
Short-term investment with tenures as short as 1 week
Diversification of investment
No annual / management fee
Customisable deals

Can I cancel my COMLSI deal?

Yes. However the costs of early cancellation may have the effect of reducing the amount of principal repayable. As such, it is not advisable to cancel your Commodity-Linked Structured Investment account deal prior to its maturity.

Who might find this investment suitable?

An investor who

Is indifferent to either USD or gold
Wants to diversify an investment portfolio
Is willing to accept exchange rate risks associated with this investment

WARNING
THE RETURNS ON YOUR STRUCTURED PRODUCT INVESTMENT WILL BE AFFECTED BY THE PERFORMANCE OF THE UNDERLYING ASSET/REFERENCE, AND THE RECOVERY OF YOUR PRINCIPAL INVESTMENT MAY BE JEOPARDISED IF YOU MAKE AN EARLY REDEMPTION. THIS STRUCTURED INVESTMENT IS NOT INSURED BY PERBADANAN INSURANS DEPOSIT MALAYSIA.

Disclaimer

Bond Investment

Foreign Currency Deposits

Commodity-Linked Structured Investment

FAQs

Most Popular Forms

Useful Information

Tools