Investing in Singapore Savings Bond

Step-by-step guide to investing in Singapore Savings Bonds (SSB). Find product information and how to buy, redeem and manage your Savings Bonds.

Product Information

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Key Details

Savings Bonds are fully backed by the Singapore Government. The Government is committed to maintaining the Savings Bond programme at least until 2020. 

Eligibility Only individuals aged 18 years and above.
Issuer Government of Singapore.
Term Up to 10 years.
Interest rate
  • Fixed coupon; interest "steps up" (increases) each year.
  • Rates are based on the average Singapore Government Securities (SGS) yields the month before.

Note: At issuance, interest rates for the entire 10-year term are fixed and locked in for each issue
Investment amount
  • Minimum per bond: S$500 
  • Maximum individual holding: S$200,000 

Note: Investment sum should be in multiples of $500.
Interest payments

Every 6 months, starting from the month of issue, on the first business day of the month.

  • For cash investments, the interest will be automatically paid into the bank account that is linked to your individual CDP Securities account. Payments will be reflected in your CDP statements and bank account statements.
  • For Supplementary Retirement Scheme (SRS) investments, interest payments will be reflected in your SRS account.
Issuance A new Savings Bond will be issued every month according to the issuance calendar.
Allotment results
  • Announced on the 3rd last business day of the month.
  • Successful applicants will be notified by the CDP by mail. For SRS investments, you will be notified by the SRS operator.
  • For unsuccessful or partially filled applications, any excess money will be refunded by the end of the 2nd last business day of the month.
Maturity and redemption
  • Redeemable in any given month, with no penalty for exiting the investment early.
  • For both maturity and redemption, you will receive the principal amount, plus accrued interest by the second business day of the next month.

Note: Redemption amounts must be in multiples of S$500.
Tax Exempt from tax.
Non-transferable
  • Savings Bonds cannot be transferred except in specific situations such as the death of the bondholder.
  • They cannot be bought or sold in the open market, traded on the SGX, or pledged as collateral.

Note: Upon the death of a bondholder, the Savings Bonds can be transferred to the rightful beneficiaries according to the person’s will or under the intestacy law. Such authorised transfers are not subject to the individual limit of S$200,000.

Interested investors may also wish to refer to the technical specifications (0.99 MB) of the product.

Risks

Did you know that Savings Bonds are one of the safest instruments you can invest in?

Fully Backed by the Singapore Government

Your principal investment and interest payments are backed by the full faith and credit of the Singapore Government. The Singapore Government has received the strongest "AAA" credit rating from international credit rating agencies.

What Happens When Interest Rates Change?

The prices of conventional bonds can change, depending on current market interest rates. If you invest in conventional bonds, you may receive more or less than your invested capital if you sell them before they mature.

However, you will always get your principal back when investing in Savings Bonds. Once a Savings Bond is issued, interest rate changes will have no effect on the bond’s value.

Should market interest rates rise, there is no price loss on your Savings Bond as you can get your full principal value back if you decide to redeem the bonds with the Government.

Should interest rates fall, you will not enjoy any price gains. However, you would benefit from the above-market interest rates on your Savings Bonds.

Returns and Interest

Savings Bonds offer you a return that corresponds with how long you hold them for. You receive less interest at the start, but the amount "steps up" or increases over time. The longer you hold your Savings Bonds, the higher your effective return.

At the beginning of each month, MAS will announce the interest rates for the entire 10-year term of that Savings Bond issue. These interest rates will be locked-in when you subscribe.

Based on Government Bond Returns

The interest rates of each Savings Bond issue are based on the average Singapore Government Securities (SGS) yields the month before applications for that issue open, and may be adjusted to maintain the "step-up" feature if market conditions do not allow it.

If you hold your Savings Bond for the full 10 years, your return will match the average 10-year SGS yield the month before your investment. In the last 10 years, the 10-year SGS yield has been between 2% to 3% most of the time.

If you decide to redeem your Savings Bond early, you will receive a lower return. You will receive pro-rated, or accrued interest.

In general, an investor who holds a Savings Bond for a given number of years would receive an average return similar to that of an SGS of the same tenor.

How Step-Up Interest Works

Let’s say you applied for $1,000 of Savings Bonds in July 2015, which pays interest based on June 2015 SGS rates. (Figures are for illustrative purposes only.)

Step-up interest rate

In the 1st year, you will earn $9 of interest, for a return of 0.9% over your 1 year investment period.

In the 2nd year, you will receive $15 of interest. On average over 2 years, you would have earned a return of about 1.2% per year.

The interest you earn will step up over time. In the 10th year, you will receive $33 of interest. Based on the interest received from the 1st year to the 10th year, your effective return would be 2.4% per year, which is also the average 10-year SGS yield in June 2015.

See also: Technical explanation of Savings Bond interest rates (0.99 MB)

Factsheets 

FAQs 

  • Product Information (585.2 KB) - What are Savings Bonds? Does the Government need the money? Why pay step-up interest? How do I calculate my return? How do Savings Bonds compare with Singapore Government Securities?
  • Application Process (585.2 KB) - What do I need to get started? How and where can I buy Savings Bonds? Why are there so many code names for Savings Bonds? How do I check and read application results? What are the fees and charges?
  • Redemption Process (585.2 KB) - How do I redeem my Savings Bonds? When and how will I get my money back? What happens when my bond matures?
  • CDP Account and DCS (585.2 KB) - Why do I need an Individual Central Depository (CDP) Securities account? How do I open one? What is Direct Crediting Service (DCS)? How do I apply for it?
  • Full Set of FAQs - All of the above in a single document.

Technical Specifications

Refer to the technical specifications (0.99 MB) for detailed information on features of the bond, application and redemption, allotment and interest rates.

 
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