Explore RCBC's Fixed Income Securities for Low-Risk Investments

The world of investing is filled with uncertainties and jargon as much as it’s filled with promises. For beginners, building a stable investment portfolio with low-risk, fixed income securities can help alleviate their apprehensions about how to start investing.

In this blog, we’ll delve into the different types of fixed income investments that offer safety and stability along with a steady stream of income.

Understanding Fixed Income

Before diving into the specific investment products ideal for beginners, it’s important to understand first what are fixed income securities.

Fixed income products promise fixed interest or dividend payments until their maturity date. Upon maturity, the owner receives the principal they invested.

These types of investments prioritize stability and the preservation of capital over higher yields, making them ideal for new investors who are not quite ready to take on risk.

Get to Know RCBC's Fixed Income Investments

RCBC offers a variety of fixed income securities to match your specific investment needs. Explore your options to find the assets that are right for you:

1. Treasury Bills

Treasury bills, or T-bills, are short-term debt securities issued by the Philippine government with maturities ranging from 91, 182, to 365 days.

T-bills are considered one of the safest investments available in the Philippines because they are backed by the credit of the national government.

Investors purchase T-bills at a discount to their face value with a minimum transaction amount of Php 100,000. Investors do not receive interest payments, but rather earn a predetermined interest rate when they receive the full face value when the T-bill matures.

T-bills are the best choice for those who want to test the waters of investment and aren’t ready for a major commitment yet.

2. Fixed-Rate Treasury Notes

Fixed-rate treasury notes (FXTN) are longer-term debt securities also issued by the Philippine government. These have a maturity ranging from 2,5,7,10,20, up to 25 years. Like T-bills, FXTNs are considered to have minimal risk because they’re backed by the national government.

However, with treasury notes, investors receive regular fixed-rate coupon payments until they mature. Then, they also receive the face value of the treasury note upon its maturity.

The flexibility of terms, stability, and regular income that fixed-rate treasury notes offer make it a great option for newbie investors with short-term to intermediate-term investment goals.

3. Retail Treasury Bonds

Retail treasury bonds (RTB) are long-term debt securities also issued by the Philippine government, so it also carries minimal risk. Investors can invest in Retail treasury bonds in short or longer terms; they can choose terms of up to 25 years.

The main difference between retail treasury bills vs treasury bonds is that bonds offer interest payments regularly on top of the bond’s full face value upon maturity. RTBs also have a lower minimum transaction amount, which starts at Php 5,000.

Retail treasury bonds are an accessible fixed income investment for those who want to try diversifying their portfolio with long-term assets.

4. Corporate Bonds

Corporate bonds are debt securities issued by public and private corporations to raise capital. These bonds typically offer higher yields than government bonds to compensate investors for the additional risk of default. With that said, corporate bonds are still relatively safe investments, especially those issued by well-established companies with strong credit ratings.

Corporate bonds have maturities ranging from three to 10 years with minimum investments starting at Php 100,000.

Corporate bonds are another sensible choice for new investors who are more comfortable taking on corporate risk.

5. Foreign Currency Denominated Bonds

Foreign currency sovereign bonds are debt securities issued by the Philippine government in foreign currencies, allowing them to leverage the power of other currencies like US Dollars.

These bonds allow new investors exposure to foreign exchange markets, which offers the benefits of investment diversification. However, foreign currency sovereigns offer lower yields than peso-denominated securities. They also carry country risks like political, economic, exchange rate, and technological influences that affect the issuing country’s credit rating.

So, this type of bond may be more suitable for new investors with a slightly higher risk tolerance.

Secure Your Future with Fixed Income Investments

Don’t be afraid to start investing because RCBC is here to guide you. We offer different fixed income securities that can ease you into the world of investing. Start your journey with RCBC’s Peso Fixed Income Investment to access low-risk investments that are guaranteed to help your money grow and empower you to achieve your financial goals.

Get in touch with us to get started on investing!