Savings Bonds
1. What are Savings Bonds? What are the main features of Savings Bonds?
Savings Bonds are a special type of Singapore Government Securities (SGS) with features that make them accessible and suitable to individual investors:
Principal-guaranteed Savings Bonds : You will always get your investment amount back in full, i.e. no capital losses.
Long-term investment Savings Bonds : You can invest for up to 10 years and earn interest that increases over time. The longer you hold your bond, the higher your return.
Flexible redemption option Savings Bonds : You don’t have to decide ahead of time how long you want to hold your Savings Bonds for. You can get your funds back within a month, with no penalty.
2. Why is the Government introducing Savings Bonds? Why is this necessary?
The Government is providing a long-term savings option (Savings Bonds) that offers safe returns, for Singaporeans who can and wish to save more for the long-term. Savings Bonds will complement the CPF system and other savings and investment options already available (e.g. deposits, equities, unit trusts, endowment plans), offering more choices for the individual investor.
3. Does the Government need the money? What will the Government use the money for?
The Government is not issuing Savings Bonds to finance its expenditure. The money raised from issuing Savings Bonds cannot be spent and will be invested.
source: MONETARY AUTHORITY OF SINGAPORE
4. Who is this product meant for? How do I know if Savings Bonds are suitable for me?
All individual investors can apply for and hold Savings Bonds.
In general,
Retirees and those nearing retirement can invest in Savings Bonds as a safe and flexible option to maintain the value of their nest egg.
Individuals who do not have a large amount of capital can start investing in Savings Bonds with as little as $500 for up to 10 years.
Those looking to set aside a portion of their savings as rainy day funds can benefit from the flexibility to redeem Savings Bonds when they need the cash. While holding the bond, they will earn an interest rate that steps-up over time.
Active investors could allocate a portion of their investment to Savings Bonds alongside cash holdings and other bonds to diversify risks in their investment portfolios.
5. When can I start buying Savings Bonds?
Applications for Savings Bonds will open in the second half of 2015. MAS will announce the launch date one month before application opens for the first Savings Bond issue.
To apply for Savings Bonds, you need to have a DBS/POSB, OCBC or UOB bank account and ATM card. This is because applications will be through the ATMs. DBS/POSB customers may also apply for Savings Bonds through Internet Banking.
You also need an individual (not joint) CDP Securities account with Direct Crediting Service (DCS) activated. Please note that you must be at least 18 years old to open an individual CDP Securities account.
