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1. How to Invest in Bonds ? |
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Primary Market - purchase of newly-issued bonds; issued at fixed intervals.
Secondary Market - bond purchase from financial institutions by agreement; interest applied 2-3 working days after sales contract has been finalized.
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2. Advantages of investing in bonds |
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Secure investment plan.
Higher interest rates than deposit accounts.
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3. What Bond Duration to Select ? |
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Varies with investment objectives - for instance, when requiring high liquidity, opt for a bond that does not bear more than 6 months maturity; for financing your children studies in 5-10 years, select an investment scheme that fits the given time frame.
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4. Are Investments in Bonds Taxable ? |
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Natural persons pay taxes on the premises (15% rate is applied).
Juristic persons add figure up to overall accounting in order to settle income revenue tax at the end of the year.
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5. What Reference is Provided with The Purchase of Bonds ? |
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A bond certificate (if any) or debt instrument information account.
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6. Is Crediting Interest Return Charged ?
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BAY charges 10 THB per transaction (account credit) and 100 THB for initial capital credit (applicable for branches located within the clearing area); for branches situated upcountry, inter area transfer fees is 10 THB per 10,000 THB transfered (maximum charged 750 THB).
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7. How Does Purchasing Debentures in the Primary and Secondary market Differ ? |
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Debentures in the primary market sells for 1,000 THB per unit (Par), while the interest rate (Coupon) applied is identical to the one posted on the instrument. On the other hand, purchasing debentures in the secondary market offers prices higher or lower than the Par value (depending on the interest rate at that given moment), while the Yield To Maturity rate could be lower or higher that the interest rate (Coupon) posted on the debenture.
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8. Will Buying Bonds Incur Loss as Buying Stocks ? |
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Investors will be paid the agreed value upon bearing the bond until maturity; on the other hand, premature selling could result in either Capital Gain (in interest rate decreases) or Loss (if interest rate increases), depending on the interest rate status at that given period.
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9. How to Clear Taxes When Buying Debentures ? |
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1. Interest return from debentures - 15% tax
2. Capital Gain (profit derived from selling debentures) - 15% tax
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