【Passive Income 2025】Ways to earn passive income in Hong Kong.

What is passive income?

Passive income refers to the ability to continuously receive income without directly participating in work, providing services, or exchanging time and labor. However, this does not mean that you are completely without work or effort, but generally involves investing a certain amount of time and resources in the early stages to build and manage corresponding investments or assets. The advantages of passive income are that it can create a stable income for individuals, without having to exchange income for labor time, indirectly allowing people to allocate more time and space to do what they want, while also helping to achieve financial freedom.

Products that generally generate passive income include:Bank fixed depositsMoney market funds,Bonds and bond funds、Gold, while Futu Cash Management The products included in Futu Cash Management mainly invest in government short-term ​Bonds, ​​Banks' time deposits, and other high-security MMF, which can also bring you relatively stable passive income.

If you want to have a stable passive income, Futu Cash Management is also one of the options to consider.

Earning Passive Income Method 1 - Hong Kong Dollar Time Deposits

Time deposit is a financial product usually provided by banks, supporting different currencies such as Hong Kong dollars, US dollars, etc. It is a savings method where you deposit a sum of money into a bank's time deposit account, agreeing not to withdraw the funds within a specific period of time (referred to as the deposit term). Common deposit terms include 7 days, 1 month, 3 months, 6 months, 1 year, etc., depending on your needs. During this period, the deposit amount will earn the agreed interest. When the deposit term ends, you can retrieve the principal and the accumulated interest.

However, if there is a sudden lack of cash flow during this period and an early withdrawal is desired, interest will be lost and penalties or fees will need to be paid. Time deposits are a relatively safe investment method, and the Hong Kong Deposit Protection Scheme provides up to 0.8 million HKD protection for each depositor's funds in each member bank.

However, it is important to note that deposit interest rates may be affected by inflation and other economic factors, which may not fully offset the currency depreciation caused by inflation.

In general, regular deposits have the following advantages and disadvantages:

• Fixed interest rate: Time deposits often offer a fixed interest rate, which means you can determine your returns during the deposit period. This helps you make accurate financial plans and know how much interest you will earn.

• Safe and worry-free: Time deposits are a simple and easy-to-understand financial product. You just need to deposit money in the bank, agree to the deposit period and interest rate, and then wait for the term to be up to retrieve your principal and interest without needing to pay long-term attention to market conditions.

• Low risk: Compared to other investment options, such as Stocks or Bonds, time deposits are a lower-risk savings method. Your deposit amount is generally protected by a deposit insurance scheme, which means that even if the bank encounters difficulties, deposits of 0.5 million or below can be protected.

• Low liquidity: Due to the nature of time deposits, your funds are fixed during the deposit term and cannot be accessed at any time unless penalties or fees are paid. If you anticipate needing these funds in the short term or in an emergency, a time deposit may not be the most ideal choice.

• Minimum deposit amount: Banks generally set a minimum deposit amount requirement for time deposits, with the current standard minimum deposit amount being HKD $10,000. To earn higher interest, a higher minimum deposit amount requirement will also apply. However, virtual banks may not set a minimum deposit amount requirement.

• Inflation risk: The fixed interest rate during the deposit term may not fully offset the effects of inflation. If the inflation rate exceeds the interest rate of the time deposit, the actual purchasing power of your funds may decline.

Further Reading: 2025 Latest Comparison of Bank Time Deposit Interest Rates

Passive Income Method 2 - Futu Cash Treasure

Futu's MMF Flexibility and Earnings, helping you turn idle money into income. MMF is the collective term for Futu's MMF brand. The cash funds under the MMF brand mainly invest in government short-term bonds, bank time deposits, and other high-security monetary tools. The investment period is relatively short and stable, suitable for all types of investors, especially conservative investors.

Benefits of Futu's MMF

• Low threshold: subscription starts at HKD $0.01, even $100 can be purchased.

• High flexibility: you can buy or withdraw cash anytime according to your cash flow needs, and also trade at any time.

• Ideal and stable returns: dollar MMF average return 4.8* + 5% account opening reward^

Example: assuming you participate in the Futu Cash Treasure activity and invest HKD $30,000, with a holding period of 365 days (one year), the maximum you can enjoy in one year = 5% rebate amount + total return in one year. Participating in this activity and holding HKD $30,000 for one year can earn a 5% rebate amount of HKD $1,500, with an estimated total return of HKD $1,440 based on the current average ROI of 4.8%, the actual highest yield in one year is HKD $2,940.

*The 4.8% average return is derived from the average increase of all dollar MMFs established for over a year on the Futu platform over the past year, with data as of March 4, 2025. Historical returns are for reference only, and past performance of the Fund cannot predict future performance. Even with recorded positive returns, it does not mean positive returns can be obtained.

The 5% account opening reward is applicable to all funds on the Futu platform, and cannot be combined with rewards from other new customer activities. The offer is subject to terms and conditions.

• 0 Redemption Fee: All funds are commission-free and exempt from redemption fees, and the account net asset value represents the real investment returns after deducting management fees.

• Automatic Redemption Mechanism: Futu Cash Treasure has an automatic redemption function. After activation, the system automatically buys MMF with the cash in your securities account after the market closes every day; simultaneously, the MMF assets will count towards your purchasing power for direct use in stock trading, subscribing to new stocks (without financing interest), and buying non-MMF; if the account generates any debt, it willAutomatically redeemthe MMF in the market to repay the debit balance, no need for manual redemption.

Further Reading: Futu Cash Treasure, the average return of the USD MMF is 4.8%.

In summary, money market funds have higher security, but in extreme situations, such as default of short-term notes purchased by fund companies, sudden sharp rise in interest rates leading to bond price collapse, market panic-driven redemptions, it can still bring losses to investors.

Passive income generation method 3--bonds

Bonds are financial instruments issued by issuers to raise funds, promising to pay interest at a fixed rate within a specific period and return the principal at maturity. As a long-standing investment tool, bonds have been widely favored by various types of investors due to their regular interest payments and principal repayment at maturity. Particularly, sovereign bonds issued by countries or governments are well-known for their higher security. As investors in Hong Kong, the most accessible bonds are probably the Treasury Bonds issued by the US government.

US Treasury Bonds (U.S. Treasury Bond, also known as U.S. Bonds) are long-term debt instruments issued by the US government to raise funds to support its operations and debt repayment. These Treasury Bonds are mainly issued to a variety of investors, including large institutions and individual investors, and enjoy high liquidity and outstanding reputation in the global financial markets. Due to their stability and safety, US Treasury Bonds are often seen as one of the preferred investment tools in risk management strategies. Futu also providesDifferent maturities of U.S. Bonds, meeting investors' goal of stable dividend income.

What are the benefits of buying U.S. Bonds?

• Safety: Because US Bonds are issued by the USA government, they essentially have the assurance of credibility and the ability to repay debts.

• Fixed ROI: Therefore, US Treasury Bonds are generally regarded as "investment-grade" bonds and are recognized as one of the safest investment tools in the world.

• Higher liquidity: US Treasury Bonds provide fixed returns for investors, allowing them to earn stable interest income after purchasing them.

• Risk balancing: Compared to other types of bonds, US Treasury Bonds have higher liquidity. If high-risk products are purchased alongside US Treasury Bonds, the latter can serve to balance risk and return.

What are the risks of buying US bonds?

However, although the default risk of US bonds is relatively low, there is still a possibility. In addition, there are also:

• Interest rate risk: Bond prices are inversely related to interest rates. The lower the interest rate, the higher the bond price; conversely, the higher the interest rate, the lower the bond price, which may lead investors to prefer to deposit money in Banks, decreasing the attractiveness of bonds, resulting in a drop in market price, potentially causing losses for investors who already hold the bonds.

• Exchange rate risk: There is always an exchange rate risk when purchasing overseas bonds.

Further Reading: How to Buy US Bonds in Hong Kong

Passive income method 4 - dividend stock portfolio

"Dogs of the Dow" is a dividend stock investment strategy proposed by Michael B. O’Higgins in 1991, specifically designed for investors seeking dividend income. The operation of this strategy is very intuitive: select the ten stocks with the highest dividend yields from the Dow Jones Industrial Average, buy at the beginning of each year, and sell at the end of the year.

In 2022, when the overall performance of the US stock market was poor, portfolios using the Dogs of the Dow strategy showed remarkable performance, rising by 2.2%. In comparison, the Dow Jones Industrial Average dropped by 8.8%, and the S&P 500 and NASDAQ indices fell by over 10%. This demonstrates that during market instability, dividend-focused investment portfolios can serve as a safe haven for investors. Futu also provides 24/5 US stock trading.US stock trading。

This strategy is suitable for investors with lower risk tolerance, who prefer stable dividend income but still expect some capital appreciation.

Although it sounds conservative, there is still a possibility of losses, such as possible dividend suspensions, interest earning erosion, etc.

What is the principle of the Dog Stock Dividend Portfolio?

The core idea of Dow Jones's dividend stock strategy is to focus on dividend yield, using it as a key indicator to evaluate the value of stocks. A high dividend yield typically means that the stock price may be undervalued, providing potential returns that exceed the average level of large-cap stocks.

This principle is based on the fact that the 30 component stocks of the Dow Jones Industrial Average are generally carefully selected large, experienced blue-chip stocks with good financial conditions and billions of dollars in market capitalization, as well as a stable profit record.

These companies often have a long history of dividend payments and are less likely to change their dividend policies, resulting in high dividend stability. However, their stock prices may still be affected by the overall market environment and economic cycles. When a company is in a downturn of the business cycle, its stock price often falls below the peak.

Therefore, stocks with high dividend yields may represent companies that are currently at the bottom of their business cycle, with relatively lower stock prices, providing an attractive entry point for investors to look forward to future appreciation opportunities.

Further Reading: 2024 High-Quality Dividend Stock Selection Strategy

Note:

This content does not constitute an invitation, solicitation, recommendation, opinion, or any guarantee of any securities, financial products, or tools. Investment involves risks, investors should carefully read the fund information and related documents (including its risk factors). Investors should note that the price of fund products can rise or fall, may fluctuate significantly in a short period, investors may not be able to withdraw their investment in the fund, and the past performance of the fund cannot predict future performance.

Any forward-looking statements in this content should not be considered guarantees of future performance, and actual circumstances or developments may differ significantly from those statements. The principal and interest of Bonds are repaid by the issuer or guarantor (if any), and Bondholders must bear the credit risk of the issuer or guarantor. If the issuer or guarantor fails to fulfill the contract, Bondholders may not be able to recover the principal and interest of their investment in Bonds. US government Bonds are issued and guaranteed by the US government, and Bond trading takes place over the counter. Investment involves risks, and prices are affected by market supply and demand. Although there is a higher chance of recovering the principal and interest of an investment in US government Bonds, early redemption of Bonds by Bondholders may result in losses due to market risks. The likelihood of the US government defaulting on the principal and interest of Bonds is low, but changes in its fiscal status and credit ratings could also lead to default risks. *The average ROI of 4.8% is derived from the average increase of all US dollar money funds established for over a year on the Futu platform, as of March 4, 2025. Historical returns are for reference only, and the past performance of the Fund does not predict future results. Even a recorded positive return does not imply a guarantee of positive returns.

Therefore, before making any investment decisions, clients should carefully read the relevant sales documents, fully understand the risks, as well as the characteristics and consequences of relevant laws, taxation, and accounting, and decide whether the investment suits their financial situation and investment goals, and whether they can bear the related risks based on their individual circumstances. If necessary, appropriate professional advice should be sought.