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    Jul 22, 2015

    MAS: No need to rush for Savings Bonds

    INVESTORS looking for a flexible, low-risk option can apply for the long-awaited Singapore Savings Bonds from September.

    Successful applicants will receive their Savings Bonds in their Central Depository (CDP) accounts on Oct 1, when the first issue is released.

    A new Savings Bond will be issued every month after that for at least five years, so you need not rush for the first issuance, said the Monetary Authority of Singapore (MAS) in a statement yesterday.

    The Government plans to issue $2 billion to $4 billion of the Savings Bonds this year.

    Singapore Savings Bonds are a new type of bond that offers individual investors a safe, long-term and flexible product.

    You can apply for each Savings Bond issue with as little as $500 and up to $50,000, and hold up to $100,000 of the Savings Bonds - which have a 10-year term - at any one time.

    MAS will provide details of the first Savings Bond issue on its website ( after 4.30pm on Sept 1, such as the interest-rate schedule. These details will also be published in newspapers the next day. Applications for the first issue close on Sept 25.

    A key feature of the Savings Bonds is that they are principal-guaranteed by the Government. Investors also enjoy flexibility in that they can redeem their Savings Bonds - partially or fully - in any given month before maturity, with no penalty for an early exit.

    Interest is paid half-yearly and is on a step-up basis to encourage investors to hold for 10 years. The return for holding a Savings Bond until maturity will match the average 10-year Singapore Government Securities yield, which has been between 2 and 3 per cent.

    If you want to apply for a Savings Bond, you must have a bank account with participating banks - DBS Bank/POSB, OCBC Bank or United Overseas Bank - and an individual CDP account with the direct crediting service enabled.

    You can then apply for and redeem Savings Bonds through automated teller machines. DBS/POSB customers can also use Internet banking. There is a $2 non-refundable transaction fee for each application and redemption request.

    Henry Lim, 56, said he plans to set aside $50,000 in Savings Bonds as they are safe and the returns are "decent".

    "It is almost like having cash at hand, as I can redeem the Savings Bonds for cash with no penalty if the need arises," he added.

    Jeremy Soo, DBS' managing director and head of its consumer banking group here, said "the Savings Bonds are good instruments for novice investors to diversify their investments and learn to invest in a fixed-income product".

    Besides the Savings Bonds site - which has tools to help investors keep track of application timelines and understand the returns over different investment periods - you can call the Savings Bonds hotline on 6221-3682 for inquiries.