• HSBC Secured Overdraft

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    HSBC Secured Overdraft Singapore

    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.

    Features of HSBC Secured Overdraft

    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:

    • Investments: The different types of investments against which you can secure an overdraft include bonds, unit trusts, structured products, and equities held with the HSBC Bank.
    • Credit limit: The overdraft limit is dependent on the type of investment and the applicable Maximum Advance Ratio (the maximum percentage of the value of an investment for which the bank is willing to extend a secured overdraft).
    • Interest: The interest for your overdraft is calculated only on the amount of funds utilised. It is calculated on a daily basis.
    • Funds access: You can access the overdraft funds via cheque, internet banking or ATM centres.
    • HSBC customers: Secured overdraft is available for HSBC Premier customers.
    • Major currencies: The loan is available in SGD and USD currencies.

    Benefits of HSBC Secured Overdraft

    Listed below are some of the benefits of HSBC Secured Overdraft facility:

    • You can secure funds without selling your existing long-term investments.
    • You have the flexibility to manage your short-term financial needs by securing overdrafts against investments such as bonds, unit trusts, structured products, and equities held with the HSBC Bank.
    • The interest for your secured overdraft is calculated on a daily basis but only for the amount of funds you have used.
    • HSBC Bank offers secured overdraft facility in major currencies.
    • There is no limit on your withdrawal amount and there is no service fee charged for the secured overdraft account.
    • Enjoy flexible repayment options as there is no minimum monthly repayment for your secured overdraft.
    • You can increase or decrease the limit of your overdraft depending on the investment against which you have borrowed loan.

    Interest rates

    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.

    How to apply for a HSBC Secured Overdraft facility?

    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:

    • Bonds.
    • Shares (index stocks traded on SGX mainboard, the stock have to be priced above S$1).
    • Time deposits.
    • Structured products (distributed by the bank).
    • Unit trusts (distributed by HSBC Bank).

    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 of your HSBC Secured Overdraft facility

    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
    Shares 50%

    Explore the Products Offered By HSBC Bank:

    FAQs

    Following are the frequently asked questions about the HSBC Secured Overdraft facility:

    • What is a Secured Overdraft?

      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.

    • What are the benefits of a HSBC Secured Overdraft facility?
      • You can manage your short-term cash needs without selling your long-term investments.
      • There is no minimum income requirement to apply for a HSBC Secured Overdraft facility.
      • There is no minimum monthly repayment as long as the utilisation is within your overdraft limit.
      • The interest rate for a Secured Overdraft facility is lower than unsecured lending facilities.
    • What is the minimum repayment amount?

      There is no minimum repayment amount applicable if the utilised amount is within your secured overdraft limit.

    • What are the repayment methods accepted for a HSBC Secured Overdraft account?

      Repayments can be made through cheque, cash deposits at a bank branch, ATMs or internet banking.

    • How to terminate or cancel my HSBC Secured Overdraft account?

      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.

    • Who can I contact for additional information on the HSBC Secured Overdraft facility?

      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).

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