Govt open to use of SRS cash for S’pore Savings Bonds

SINGAPORE — The Government is open to the idea of allowing Singaporeans to use money in their Supplementary Retirement Scheme (SRS) accounts to purchase Singapore Savings Bonds (SSB), but the additional benefits from doing so are “not clear” presently, said Mr Ong Ye Kung, who is a board member at the Monetary Authority of Singapore.

He noted that SRS money can already be invested in Singapore Government Securities, which offer the same returns as the savings bonds if held to maturity.

There is also a cost involved in making the SRS channel available, and the government has to assess if it can benefit a “sufficiently broad segment of people”, he added.

But it is an idea “we are open to and have been studying”, said Mr Ong in reply to a parliamentary question posed by West Coast Member of Parliament Patrick Tay to the Prime Minister.

To Mr Tay’s question on whether caps on SSB purchases can be raised, Mr Ong, who is Minister for Education (Higher Education and Skills) and Second Minister for Defence, said the limits of S$50,000 per individual for each issue, and maximum overall limit of S$100,000 are not cast in stone.

“However, so far, only a small minority of SSB investors have reached the boundaries of these limits,” he said.

One in five applicants, on average, ask for the maximum S$50,000 of a given issue, and less than 7 per cent of investors are near, or have reached, the S$100,000 overall limit.

The government will monitor take-up of SSB before considering whether to raise the limits, he said.

The limits ensure that the SSB can be available to more individuals.

In December, the Monetary Authority of Singapore announced that up to S$2 billion of SSB will be offered this year.

To date, more than 40,000 individuals hold more than S$1.1 billion of SSB on aggregate, said Mr Ong.

First issued in Oct 2015, the SSB have not garnered the interest initially expected due to lower returns compared with riskier products. They can be cashed out before the 10-year tenure is up without any financial penalty. NEO CHAI CHIN