Applications open for the first Singapore Savings Bond

SINGAPORE - The Monetary Authority of Singapore (MAS) announced today (Sept 1) that S$1.2 billion of the first Singapore Savings Bonds (SSB) will be available for application starting from 6pm today through Sept 25.

The new bonds will be issued on Oct 1, and interest will be paid twice a year - on April 1 and Oct 1, the MAS said. The interest rates are on a step-up basis: the longer the SSB is held, the higher the returns will be. The bonds will have a 10-year tenor and funds can be redeemed early on a monthly basis without penalty.

On the dedicated SSB website at www.sgs.gov.sg/savingsbonds, an interest rate calculator allows an individual to calculate how much interest he or she can get for the amount of money invested. For example, if an individual buys S$10,000 of bonds in this issue and holds the securities for 10 years, the total interest earned will be S$2,691.

Only individuals can apply for the SSB, which are fully backed by the Government. He or she can invest the minimum sum of S$500 and in subsequent multiples of S$500 up to a maximum of S$50,000 in any single issue. An individual can hold a total of S$100,000 in SSBs at any one time.

Investors must have a bank account with any of the three participating banks DBS/POSB, OCBC and UOB and an individual Central Depository (CDP) account with Direct Crediting Service (DCS) enabled to apply for the bonds. SSBs are not allocated on a first-come-first-served basis, but are allotted after all applications have been collected, in a way that distributes the available bonds as evenly as possible to maximise the number of successful applicants. MAS will announce the allotment results after 3pm on Sept 28.

A new SSB will be issued every month for at least the next five years, so there is no need to rush for the first issue, the MAS said. Depending on demand, up to S$4 billion of SSBs could be issued this year, it added.