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Although you have existing investments, there are times when due to unforeseen circumstances, you may need additional funds to meet your financial needs. In such cases, your options are to withdraw cash from your savings account or sell your existing investments. HSBC offers you another option called the Secured Overdraft facility which allows you to obtain loan against your existing investments at competitive interest rates.
With an HSBC Secured Overdraft account, you can get competitive interest rates as low as 3% p.a. The other features of an HSBC Secured Overdraft facility include:
Listed below are some of the benefits of HSBC Secured Overdraft facility:
The interest rate for a HSBC Secured Overdraft is the bank’s Variable Lending Rate (VLR) + 1.75% p.a. The VLR for SGD and USD differs on a daily basis as determined by the bank as it takes into consideration several factors like costs of borrowing and market conditions. Interest for secured overdraft is calculated based on the applicable interest rates on the utilised amount on a daily basis (365 days per year for SGD and 360 days per year for USD loans). For promotional rates, contact the bank or your Relationship Manager.
You can apply for a Secured Overdraft facility by putting up your assets as collateral with the HSBC bank. The overdraft limit is granted based on the type of assets you pledge. Contact your Relationship Manager or the bank’s 24-hour customer service hotline for enquiries. You can use the following products as collateral for your secured overdraft:
The overdraft limit is subject to the daily market fluctuations of your assets. Therefore, you must repay any over-utilisation, if the overdraft limit has been decreased due to the daily market fluctuations of your collateral.
Maximum Advance Ratio is the maximum percentage of the value of an investment for which the bank is willing to extend a secured overdraft. MAR is used to calculate your overdraft limit.
|Assets pledged with the bank||Maximum Advance Ratio|
|Time deposit SGD||100% for HSBC Premier customers|
|Time deposit USD||90%|
|Unit trust||70% for funds under risk rating 1 60% for funds under risk rating 2 or 3 50% for funds under risk rating 4 or 5|
|Bonds, Structured Deposits, and Structured Notes||60% for funds under risk rating 1 to 4 30% for funds under risk rating 5|
Following are the frequently asked questions about the HSBC Secured Overdraft facility:
Secured Overdraft is a revolving credit that is secured by pledging your assets to the bank. The overdraft limit is granted depending on the type of assets you put up as collateral.
There is no minimum repayment amount applicable if the utilised amount is within your secured overdraft limit.
Repayments can be made through cheque, cash deposits at a bank branch, ATMs or internet banking.
You must submit a written instruction for the cancellation of your Secured Overdraft account to the bank. You should also ensure there are enough funds to settle outstanding dues, if any.
Contact your Relationship Manager or HSBC 24-hour customer service (1800-HSBC NOW 4722 669 for Singapore calls and 656-HSBC NOW 4722 669 for overseas calls).