Sri Lanka
You are here:
TIERA-Deshabhimani
TIERA Investments
Structured Deposits
SFIDA
Treasury Bills
Treasury Bonds
Investment Knowledge

You are not logged on.  Log on to Internet Banking to Internet Banking Icon: Not logged on

Tiera


"Investments on TIERA and TIERA-2 will be temporarily closed as per instructions received from the regulator."

TIERA

Earn higher returns from Government Securities

Invest in Sri Lanka government securities through a "Treasury Bond Investment External Rupee Account (TIERA)" or "Treasury Bill Investment External Rupee Account (TIERA-2)" with HSBC and earn potentially higher returns on your investments.

Benefits

  • Potentially earn higher returns on your investment by investing in government securities
  • No further taxes apart from 10% Withholding Tax imposed at the primary issue of Treasury Bills / Bonds (exempt from Income Tax, Debit Tax, and Stamp Duty)
  • No Exchange Control regulations to repatriate interest and maturity proceeds in any designated currency to your overseas account
  • Ability to forward book foreign exchange to mitigate potential exchange rate risk
  • Ability to enter into short term repurchase (REPO) agreements
  • Ability to track your account by using Personal Internet Banking from HSBC

Features

    • Citizens of foreign states now have the ability to invest in Treasury Bills and Treasury Bonds and benefit from high interest    yields

    • Remittances to the TIERA or TIERA-2 would automatically be converted to Sri Lankan Rupees (local currency) and invested in    government securities

    • Upon maturity, interest and maturity proceeds can be repatriated in any designated currency to the account specified by you

    • Credits to:

       TIERA:
      - Inward remittances received from abroad through banking system
      - Sale proceeds realized out of sale or maturity proceeds of Treasury Bonds and any income realized by way of capital gain      thereof
      - Interest received on Treasury Bonds
      - Transfers from SFIDA/SIERA accounts maintained in the Domestic Banking units and the accounts maintained in off-shore units of licensed commercial banks

       TIERA-2:
      - Inward remittances received from abroad through banking system
      - Sale proceeds realized out of sale or maturity proceeds of Treasury Bills and any income realized by way of capital gain      thereof
      - Transfers from SFIDA/SIERA accounts maintained in the Domestic Banking units and the accounts maintained in off-shore units of licensed commercial banks

    • Debits to:

       TIERA:
      - Outward remittances of sale proceeds, maturity proceeds and interest of Treasury Bonds or any income realized by way of      capital gain
      - Payments for investment in Treasury Bonds
      - Payments of relevant bank charges
      - Local expenses incurred by you
      - Transfers to SFIDA/SIERA accounts maintained in the Domestic Banking units and the accounts maintained in off-shore units of licensed commercial banks

       TIERA-2:
      - Outward remittances of sale proceeds, maturity proceeds and interest of Treasury Bills or any income realized by way of      capital gain
      - Payments for investment in Treasury Bills
      - Payments of relevant bank charges
      - Local expenses incurred
      - Transfers to SFIDA/SIERA accounts maintained in the Domestic Banking units and the accounts maintained in off-shore units of licensed commercial banks

Requirements

Eligibility

  • Citizens of foreign states
  • Corporate bodies incorporated outside Sri Lanka
  • Foreign institutional investors such as foreign country funds, mutual funds or regional funds

 

Minimum Investment

A minimum investment of US$ 10,000 or equivalent in other designated foreign currencies.

 

Investment Tenures

Treasury Bills - 3 Months (91 Days)
                         6 Months (182 Days)
                       12 Months (364 Days)

Treasury Bonds - 2, 3, 4, 5, 6, and 10 Years

Invest in a TIERA

Opening a TIERA account



Risk Associated with this investment include:

  • Principal risk: At maturity, customers may receive the Face Value of the Bill/Bond. If the Bill/Bond is prematurely liquidated, there is a possibility that the customer will suffer a loss on the principal sum when compared with the initial purchase price of the Bill/Bond. Furthermore, currency rates fluctuate; as such there is no guarantee that the investment will produce returns in excess of the local currency depreciation or in excess of those available on other investments or savings products linked to current market interest rates.
  • Early termination by customer: Should the Bill/Bond be liquidated prematurely by the customer, the bank will deduct any early liquidation costs from the principal payable to the customer. It is therefore possible that customers will not receive 100% of the initially invested amount back. These termination costs may be substantial and hence, it is important that customers are prepared to hold this investment until maturity or alternatively be prepared to incur these costs in the event of early liquidation.
  • Market risk: Many factors can affect the level of currency exchange rates, including the political and economic environment, business conditions, customer sentiments and confidence. All of these factors can refer to local or global markets. Treasury Bonds and Bills can be volatile instruments and may be subject to considerable fluctuations in value and other risk inherent in investing government securities
  • Interest Rate Risk: Investors are exposed to the movement of interest rates whenever the Bills/Bonds are sold prior to maturity. Movements in interest rate will have an impact on the value of the Bond if sold prior to maturity. The longer the tenor of the Bond, the more sensitive the Bond will be to interest rate changes. The lower the coupon rate on a bond, the more sensitive is its price to a given change in interest rate.
  • Foreign exchange risk: An account holder will be subject to fluctuations in exchange rates, which could affect the account holder's return either negatively or positively upon conversion into original currency of the account.
  • Re-investment risk: On Bonds, the Yield to Maturity (YTM) is computed with the assumption that coupons [interim interest payments] can be reinvested at the same rate as the quoted YTM. However, the customer needs to consider that he/she will not be able to invest the bond coupons at the same YTM rate quoted at purchase. This might result in the total investment yield being less than the original YTM rate.
  • Credit Risk: The deposit may involve credit risks of the deposit taker. In the case of a default by the issuer of the security - in the case of Treasury Bills and Treasury Bonds it is the Government of Sri Lanka - the customer may receive back substantially less than what is invested and many even receive nothing.
  • Sovereign Risk: Repayment of the Face Value/coupon Interest/ interest may be subject to sovereign risk. This includes the potential default by the government or the occurrence of political or economic events resulting in governmental action such as declaration of a moratorium on debt repayment or negating repayment obligations of the sovereign issuer. If any such event were to occur, customers may lose up to all of their initial investment in the Bill/Bond.
  • Tax Risk: Although these investments are exempted from the government of Sri Lanka taxes, the customer could be liable to tax from the country of residence/origin. These taxes imposed by the country of origin due to regulatory requirements/changes/tax laws will need to be borne by the investors/customers.
    •

    Contact us

    E mail us

    Branch/ATM Locator

    Bank Holidays

    Bank Operating Hours

    Maximum card security on your overseas travel

    Managing your money

    Day to day money management

    Money transfer services

    Consumer Assets

    Quick links

    Credit cards

    HSBC Premier

    Privacy and Security   |   Terms of Use   |   Hyperlink Policy
    © Copyright 2010. The Hongkong and Shanghai Banking Corporation Limited 2010. All rights reserved.