What are bonds?
Bonds are debt securities. A borrower, sells bonds to lenders with a promise to pay regular interest over a period of time (the “tenor”) and return lenders’ money at a set date in the future ( the “maturity date”).
How do bonds work?
Borrowers, which can be the government or corporations, issue bonds to the public in order to raise funds for their projects, operations, repayment of existing debt, etc.. Lenders, which can be corporations or individual investors, are then paid regular interest throughout the life of the bond thus providing stable income for the lender/investor. Upon maturity, the lender gets the last interest payment plus his full principal back.
Why invest in bonds?
Bonds are affordable, low risk, and accessible online. While returns are not as high as stocks or other equity funds, its interest rates are still generally higher than most savings or time deposits.
Are bonds risky?
Compared to stocks, bonds are less risky. Government bonds, in particular, are considered default risk-free investments because they are a direct and unconditional obligation of the government. Investors are guaranteed to get their principal back upon maturity. For corporate bonds, however, there is that chance that the company would not be able to repay its debt. Hence, it is important to choose stable companies when investing in these types of bonds.
Who can invest in bonds?
For online, only single, individual FirstMetroSec accounts are allowed to order bonds. If you do not have a FirstMetroSec account yet, account opening is quick and easy upon submission of complete requirements. Click HERE
to learn how. For In-Trust-For (ITF) and joint accounts, please email First Metro Investment Corporation (FMIC): email@example.com.
How much is the minimum investment amount?
It depends on the bond offering. For Premyo Bonds, it’s just P500; for Retail Treasury Bonds (RTBs), P5,000; for Retail Dollar Bonds (RDBs), $300, and in $100 multiples thereafter.
How much is the maximum investment amount?
The maximum amount per transaction is P500,000 or $10,000. For higher amounts, you may divide into multiple online orders instead.
Can I buy bonds anytime?
For now, FirstMetroSec only accepts buy orders for bonds during the offer period. Make sure to check our announcements on these important dates.
Can foreigners invest in bonds?
Yes. You will need to submit your Alien Certificate of Registration (ACR) Card when you open a FirstMetroSec account. Check the complete list of requirements HERE
Can I buy bonds from abroad?
Yes, provided that you have an individual FirstMetroSec account. Ordering is online and may be accessed anywhere in the world. You may email firstname.lastname@example.org
When and how will I receive interest payments?
The schedule of interest payments depends on the issuer (e.g. quarterly, semiannually, or annually). These will be credited automatically to your FirstMetroSec account as Buying Power.
Are interest payments subject to tax?
For Premyo Bonds and Retail Treasury Bonds, interests are subject to 20% withholding tax. Meanwhile, for Retail Dollar Bonds, tax is paid by the government so the investor will get the interest payment in full.
What would be my proof of investment?
After issue date, you may download your Confirmation of Outright Sale from the Accounts > Statements tab. In the same section, you may also download Bureau of the Treasury’s Summary of Transactions, which shows your nROSS Account no.
Are there additional charges when investing in bonds thru FirstMetroSec?
None. Zero broker’s fees for primary issuances (similar to Initial Public Offering or IPO in stocks).
Can I pre-terminate/withdraw my bond investment?
Can I sell my bond investment?
Yes, you can sell it in the secondary market ANYTIME based on the prevailing market rate, and is subject to fees and taxes. Click HERE
to learn how.