Parliamentary Replies
 Published Date: 01 March 2017

Reply to Parliamentary Question on Singapore Savings Bond

QUESTION NO. 1011

NOTICE PAPER 567 OF 2017

FOR ORAL ANSWER

Date: For Parliament Sitting on 1 March 2017

Name and Constituency of Member of Parliament

Mr Patrick Tay Teck Guan, MP, West Coast GRC

Question:

To ask the Prime Minister (a) whether the current purchase limits of Singapore Savings bonds can be raised; and (b) whether Singaporeans can be allowed to use monies in their Supplementary Retirement Scheme Account to purchase the Singapore Savings Bond.

Answer by Mr Ong Ye Kung, Minister for Education (Higher Education and Skills) and Second Minister for Defence, on behalf of Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS:

1   More than 40,000 individuals now hold over $1.1 billion of Singapore Savings Bonds in aggregate. The Savings Bond is a good alternative to cash held in savings and fixed deposit accounts. Our efforts have therefore focused on making it convenient for individuals to apply for Savings Bonds through ATMs and internet banking channels.

2   Mr Tay has asked if SRS monies can be used to purchase Savings Bonds. This is an idea we are open to and have been studying. There is of course a cost involved in making this channel available and we have to assess whether it can benefit a sufficiently broad segment of people. As of now, the additional benefits are not clear since SRS monies can already be invested in Singapore Government Securities (SGS), which offer the same returns as Savings Bonds if held to maturity.

3   Mr Tay has also suggested raising the individual limits on purchasing Savings Bonds. Currently, the maximum investment amount for each Savings Bond issue (or “Issue Limit”) is $50,000 and the maximum individual holding (or “Overall Limit”) is $100,000. These limits ensure that Savings Bond can be available to more individuals.

4   The current limits are not cast in stone. However, so far, only a small minority of Savings Bond investors have reached the boundaries of these limits. Only one in five applicants, on average, requests for the maximum of $50,000 of a given issue. Less than 7% investors are near or have reached the $100,000 overall limit. We will monitor the take-up for some time before considering whether raising the limits would benefit a broad proportion of savers.

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