Bank perps work a little differently from what 38yrold described. Banks don't typically issue senior debt because they can always take in cheap deposits. However, they have to maintain a Basle capital adequacy ratio and two hybrid instruments qualify for capital - sub debt and perps. Perps have a higher yield than any debt because they rank lower if a company fails and are perpetual i.e., you may never see your money back. However, in the case of bank perps, the Basle rules are such that they stop qualifying for capital after a period of time, like 5-10 yrs, which is why banks typically redeem them and investors expect banks to redeem them. There is also typically a interest step-up clause to convince investors that their money won't be tied up forever. However, if the bank is in trouble, it can choose to take the higher interest rate and not redeem.
Recently
UOB issued a 4.9% S$ perp which qualifies for the new Basle III rules. I expect the other Singapore banks to follow suite. With long-term rates rising, I didn't bite on the
UOB perp. I'll wait until they hit 6% as long-term rates rise. There is good history of banks redeeming their perps. In fact,
OCBC just redeemed their 5.1% perp they issued about 5 years ago.
So, I would hold off on buying perps and bonds for a little while or until long-term rates stop rising, then I would buy and hold until maturity or redemption. If you like short term instruments, there are always a series of Credit Link Notes or CLNs available. They are used a lot by banks who lend to a corporate and want to offload the risk to investors. They are typically medium duration, about 2 years. But you have to evaluate the credit yourself and don't forget the credit of the bank issuing the notes, especially European banks. I don't touch bond ladders with a 10ft pole. The private banks make too much money off them. For bonds, I buy direct, but it's $250K to $1m minimum investment. Picked up some Capitaland bonds in 2009 for 10% yield!