With grade based margin financing starting from 3.3%p.a., cash in on one of the lower margin financing rates in town and build your portfolio of blue chip stocks.
And blue chip stocks are just the beginning. We offer the same low rate for many other Grade 1 securities, including REITs, as well. Click here to find out what grade a particular stock is classified under.
With effect from 23 September 2022, the table below reflects the revised interest rates:
|
Currency |
Flat Interest Rate |
Grade Based Interest Rate*** |
|||
|
All Securities |
Fixed Income Securities** |
Grade 1 |
Grade 2 |
Grade 3 |
|
|
SGD |
5.80% |
3.50% |
3.80% |
5.00% |
7.10% |
|
USD |
6.00% |
3.50% |
4.00% |
5.20% |
7.30% |
|
HKD |
6.00% |
3.50% |
4.00% |
5.20% |
7.30% |
Terms and conditions for Grade Based Financing are available here.
**Only applicable for a list of over 90 eligible fixed income securities, including those issued by financial and non-financial corporates and quasi-government organisations.
***For existing Margin clients, to opt into our Grade Based Interest Rate Scheme, please download this form and send the original back to Margin Finance Department or your Trading Representative.
Margin financing could potentially increase your yield. The following table shows an example of how it works.
| Initial Capital Outlay S$10,000 |
Without Margin |
With Margin |
| Capital Gain* (assuming share price increases by 10%) |
S$1,000.00 | S$3,500* |
| Margin Financing Charge@2.8% | S$0.00 | S$700.00 |
|
Net Return* |
S$1,000.00 | S$2,800.00* |
|
Effective Rate of Return* |
10% | 28%* |
*For illustration purposes only. Trade commissions and other fees were not included in the calculations.
Get more details about margin financing here.
Leverage
Margin financing is a leveraged product. Its risk and return profiles are magnified several times. While the amount of the initial margin required to enter into a transaction may be small relative to the value of the transaction, a relatively small market movement would have a proportionately larger impact which may result in losses that are in excess of the initial margin/capital invested.
Margin Calls
If the market moves against the position that you are holding, it may result in margin calls or requests to place additional funds on deposits with the company to cover the shortfall in the margin requirement level to maintain the position.
If you are unable to put in the additional funds, your broker may close out the position without prior notice to you. In addition, you will still be liable for any further losses that may result from this.
Over-Exposure and Overtrading
Investors often look only at the margin required and fail to appreciate and take into account the full contract value. When trading in a large number of contracts, the total potential exposure of such contracts may be significantly beyond the investor's financial resources.