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Enjoy a regular income stream
What are Fixed Income Securities?
Fixed Income Securities, otherwise known as Interest Rate Securities, are debt investments that pay a fixed or floating rate of return. As an investor, you are lending money to the issuer — in return, the issuer pays you interest, and promises to repay the issue price at a specific time. There are three main types of Fixed Income Securities traded on the ASX: Australian Government Bonds, Corporate Bonds and Hybrid Securities. Fixed Income Securities provide regular income compared to ordinary shares, with the opportunity to profit from interest rate movements.
How it works Interest Rate Securities are traded and settled in the same way as shares listed on the ASX. As a CommSec client, you can trade all the Interest Rate Securities that are available on the ASX.
Exchange traded bonds (XTBs) XTBs are securities backed by an underlying bond. Coupon and principal payments from the bond usually flow through to the XTB investor.
Exchange traded funds (ETFs) Fixed income ETFs provide exposure to a professionally managed portfolio of investment-grade bonds and aim to track a particular bond or index. Learn more about ETFs.
Australian Government Bonds (AGBs) An AGB can generally make fixed interest payments (called coupons), biannual or quarterly and return the face value (or face value plus CPI adjustment for Indexed bonds) at the maturity date.
Unlisted Bonds for Sophisticated Investors
CommSec has partnered with CommBank Investor Sales to provide unlisted or over-the-counter (OTC) bond investments to Sophisticated and Wholesale clients with investible assets greater than AUD $10m available to invest in $500,000 minimum parcels. To be eligible you must register your Sophisticated Investor status with CommSec through the provision of a Certified Accountants certificate. Please speak to your CommSec One relationship manager for further details.
Benefits
The benefit and risk profile changes according to the investment vehicle chosen to access fixed income. At a high level, the key benefits and risks of fixed income investments may include:
Reduced volatility and regular income As a general rule, fixed income investments are less volatile than equities and provide investors with predictable returns.
Liquidity Unlike term deposits, where your funds are locked in for a predetermined period of time, you can sell your listed fixed income investments – such as XTBs, ETFs, or AGBs – on market if you want to free up funds.
Diversification Fixed income may help you diversify your investment portfolio into cash-type investments.
Risks
Liquidity The liquidity of some fixed income securities may be lower than other ASX listed securities, such as equities.
Interest rate risk For certain fixed income securities that pay a fixed return, there is a possibility that the rate of interest you receive might not be in line with the market rate at the time. Changes in interest rates and the accrual of interest since the last coupon payment may also impact the price of your fixed income investment.
Credit risk Credit risk is the risk that the issuer may not be able to repay the promised return or the principal amount at the maturity date. This is partially reflected by the different rates of interest paid.
Please note that this is not an exhaustive list of risks and potential investors should refer to the relevant offer document.
Rates and fees
Brokerage Rates
Trade execution | Brokerage fee amount by transaction value1,2,3,4 |
|---|---|
Trade online (via website, mobile apps or other platforms) and settle your trade to a CDIA5or CommSec Margin Loan5 | $5.00 (Up to and including $1,000) $10.00 (Over $1,000 up to $3,000 (inclusive)) $19.95 (Over $3,000 up to $10,000 (inclusive)) $29.95 (Over $10,000 up to $25,000 (inclusive)) 0.12% (Over $25,000) |
Trade online (via website, mobile apps or other platforms) and settle into a bank account of your choice | $29.95 (Up to and including $9,999.99) 0.31% ($10,000 and above) |
Trades over thephone and deceased estates6 | $59.95 (Up to and including $10,000) 0.52% (Over $10,000 up to $25,000 (inclusive)) 0.49% (Over $25,000 up to $1,000,000 (inclusive)) 0.11% (Over $1,000,000) |
Trades requiring settlement through a third party6 | $99.95 (Up to and including $15,000) 0.66% (Over $15,000) |
1Different brokerage rates apply to CommSec Pocket trades executed through CommSec Pocket App or CommBank App. 2Alternative brokerage rates may be agreed from time to time and (if agreed to) will be payable under clause 22 of CommSec's Share Trading Terms and Conditions. If you are offered, and agree to a tiered brokerage rate, this may result in brokerage charges that differ from rates expressly disclosed within the CommSec FSG. 3Unless otherwise indicated, where a fee or charge is expressed as a percentage, it refers to a percentage of the transaction value. For GST rounding reasons, the final brokerage fee may result in a slight variance from the stated or expected charge, which may exceed two cents for large trades. 4Brokerage charged (shares, warrants, listed managed investments and derivatives): Brokerage at these rates applies each time you trade a stock, warrant, listed managed investment or derivative. 5To be eligible, you must trade online, be CHESS Participant Sponsored with CommSec and settle your trades through either a Commonwealth Direct Investment Account (CDIA) or a CommSec Margin Loan. 6Includes CommSec Margin Lending and Geared Investments Lending Trades and where the Commonwealth Bank exercises its rights under the loan terms and conditions. | |
Management Expense
Fund managers and issuers charge a fee for their professional management of ETFs and XTBs. You can find the Management Expense Ratio in the relevant Product Disclosure Statement (PDS).
Get started
Open a CommSec Share Trading Account to invest in Interest Rate Securities
Be up and running in as little as 5 minutes. Start by choosing one of the options below:
Already have a CommSec Share Trading Account?
If you have a CommSec Share Trading Account, login and search for Interest Rate Securities.
Login and search for IRS >
Don't have a CommSec Share Trading Account?
As a CommSec client, you can trade all the Interest Rate Securities that are available on the ASX. Join now to open a standard Share Trading Account and select ‘Use our cash account'1.
Join now >
Frequently asked questions
What is a bond?
A bond is a debt security, rather than a share. Bonds are usually issued by governments and large corporations in return for a principal amount on which interest is paid to the investor for a specified time. The interest rate is fixed. The principal amount invested is repaid to the investor on maturity.
What are exchange traded bonds (XTBs)?
XTBs are fixed interest securities traded on ASX. They bring together the predictable income and capital stability of corporate bonds, with the transparency and liquidity of the ASX market. They offer access to the performance and benefits of corporate bonds, which are normally not available directly for all investors.
How do I start trading ETFs?
All you need to start trading ETFs listed on the ASX is a CommSec trading account.
What are other considerations for investing in XTBs?
Why add fixed income to my portfolio?
While shares and property are considered growth assets, fixed interest is more of a defensive asset, which generally means it is a safer option with more predictable returns.
What are the benefits of trading AGBs?
Some of the benefits associated with investing in AGBs are listed below. A secure, regular and stable income stream Hedge against inflation
Exchange-traded AGBs provide you with a regular income stream. They have one of the lowest credit risks of any financial product.
Certain types of treasury bonds have their face value (and coupons) adjusted for movements in the Consumer Price Index (CPI).
Financial Services Guide TheFinancial Services Guide("FSG") provides information about Commonwealth Securities to help you decide whether to use the financial services we offer.
Download the Financial Services Guide
CommSec Document Download Acceptance
Before you obtain any products or services from CommSec, you must view the most recentFinancial Services Guide (FSG).
By clicking YES below I am agreeing to be given the FSG and PDS electronically by downloading these documents from this website.
Note: If you would like to receive the CommSec Financial services Guide (FSG) and relevant Product Disclosure Statement (PDS) by mail you can Contact Us.
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Share Trading Terms and Conditions For a complete outline of what your obligations are when you buy or sell shares through CommSec please review the Share Trading Terms and Conditions document.
Download the Share Trading Terms and Conditions
CommSec Document Download Acceptance
Before you obtain any products or services from CommSec, you must view the most recentFinancial Services Guide (FSG).
By clicking YES below I am agreeing to be given the FSG and PDS electronically by downloading these documents from this website.
Note: If you would like to receive the CommSec Financial services Guide (FSG) and relevant Product Disclosure Statement (PDS) by mail please contact us on 13 15 19.
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Other Forms & Brochures Forregarding other financial services we offer. If you are looking for administrative forms, please login and proceed to Support > Forms & Brochures.
Disclaimer The target market for this product can be found within the product’s Target Market Determination.
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