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Thread: Singapore Savings Bonds: 8 things you should know

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    Default Singapore Savings Bonds: 8 things you should know

    1. What are Singapore Savings Bonds?

    They are a new type of government bond, which will be launched as part of moves to make low-cost investment options more widely available to retail investors.

    A feature of the product is that a bondholder can get his money back in any month, with no penalty imposed. This means investors do not have to decide upfront the duration of their investment.

    Normally bonds have a set interest rate and investors can find themselves out of pocket if they redeem them too early.

    Singapore Savings Bond interest rates will be linked to the long-term Singapore Government Securities (SGS) rates. But unlike SGS bonds, which pay the same interest rates every year, the new product will start with smaller interest rates that will keep rising, the longer you hold on to the bond.

    2. How long can I invest for?

    Each Savings Bond has a term of 10 years, but you can redeem them in any given month before the bond matures with no penalty.

    3. How much can I invest?

    The bonds are targeted at small retail investors with the minimum investment just $500 with additional multiples of $500.

    Each individual can apply for up to $50,000 per bond issue and can hold up to $100,000 worth of the bonds at any one time.

    If a particular Savings Bonds issue is oversubscribed, there is a possibility you may not get the full amount of the bonds that you have applied for. If this happens, you can consider applying for the next Savings Bond issue in the following month.

    4. How much returns will I get?

    Interest on the bonds will be linked to long-term Singapore Government Securities (SGS) rates. While SGS bonds pay the same interest every year, Singapore Savings Bonds will pay coupons that step up over time.

    The average interest investors will receive over the period they hold Singapore Savings Bonds will match what they would have received had they bought an SGS bond of equivalent tenure.

    This means that if you hold your Savings Bond for the full 10-year term, the average interest per year on your investment will match the return if you had invested in a 10-year SGS bond.

    The 10-year SGS has mostly yielded between 2 and 3 per cent over the past 10 years.

    Singapore Savings Bonds will be issued monthly and the interest rate schedule for each issue will be announced before applications open.

    5. When can I start buying Savings Bonds?

    Applications for Savings Bonds will open in the second half of 2015.

    The Monetary Authority of Singapore (MAS) will announce the launch date one month before application opens for the first Savings Bond issue.

    6. How do I apply for Savings Bonds?

    To apply for Savings Bonds, you need to have a DBS/POSB, OCBC or UOB bank account and ATM card. This is because applications will be through the ATMs. DBS/POSB customers may also apply for Savings Bonds through internet banking.

    You also need an individual (not joint) CDP securities account with direct crediting service activated.

    Please note that you must be at least 18 years old to open an individual CDP securities account.

    7. Are Savings Bonds interest payments taxable?

    Interest income on Savings Bonds is exempt from tax.

    8. Am I allowed to transfer or sell my Savings Bonds to someone else?

    No. Savings Bonds cannot be transferred to someone else except in specific situations such as in the event of death of the individual or pursuant to a court order. Savings Bonds cannot be bought or sold in the open market, or traded on SGX like shares.

    - See more at: http://www.straitstimes.com/news/bus...12#xtor=CS1-10

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Good or bad? any comment?

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by GG789 View Post
    Good or bad? any comment?
    I saw the chart, they provided,say you invest $1,000 & redeem the bond in 10years time...you get $33. I maybe missing something? I keep $1,000 aside & in 10 years time, I only get $33...might as well keep it under my pillow??? ha ha ha or the explanation is too simplistic!

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by halsey02 View Post
    I saw the chart, they provided,say you invest $1,000 & redeem the bond in 10years time...you get $33. I maybe missing something? I keep $1,000 aside & in 10 years time, I only get $33...might as well keep it under my pillow??? ha ha ha or the explanation is too simplistic!
    then 50000, can get how much? compound interest how much ya?

    why need to lock 10 years and give us only miserable 2%

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by halsey02 View Post
    I saw the chart, they provided,say you invest $1,000 & redeem the bond in 10years time...you get $33. I maybe missing something? I keep $1,000 aside & in 10 years time, I only get $33...might as well keep it under my pillow??? ha ha ha or the explanation is too simplistic!
    $33 (or 3.3%) is only for yr 10. Ave interest rate is 2.4% which means u will get total of $240 over 10 years for every $1000 invested.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by Gigo88 View Post
    $33 (or 3.3%) is only for yr 10. Ave interest rate is 2.4% which means u will get total of $240 over 10 years for every $1000 invested.
    if i invest 50000, then i will get 12k

    no compound interest??

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Parliament: Government 'will consider' letting CPF savings be used to buy new S'pore bonds
    - See more at: http://www.straitstimes.com/news/sin....99sFKdK6.dpuf

    SINGAPORE - Buyers of a new type of government bond to be issued this year can pay only cash for now but the Government may consider allowing the use of Central Provident Fund savings, Senior Minister of State for Finance Josephine Teo said yesterday.

    Mrs Teo told Parliament that the Government will also look at letting people use funds from their Supplementary Retirement Scheme (SRS) accounts to buy the Singapore Savings Bonds. These bonds will be launched in the second half of this year as part of moves to make low-cost investment options more widely available to retail investors.

    A key feature of the product is that a bondholder can get his money back in any month with no penalty imposed. This means investors do not have to decide upfront the duration of their investment.

    Mrs Teo, who was responding to MPs who had asked about allowing CPF or SRS savings for bond purchases, said it "makes sense to start the savings bonds with cash purchases as it complements the CPF scheme".


    Each individual can apply for up to $50,000 per bond issue and can hold up to $100,000 worth of the bonds at any point. The Government will review these caps after the programme has been in place for some time, Mrs Teo said.

    The interest rates paid by the Singapore Savings Bonds will be higher than that of short-term fixed deposits but lower than that of longer-term CPF funds.

    Her remarks came during the second reading of the Government Securities (Amendment) Bill, which was passed yesterday. It allows the Government to impose restrictions on transfers and pledges in future new security issues, a change that will allow the Singapore Savings Bonds to be issued as non-tradable securities. This is necessary to protect investors from capital losses, Mrs Teo said.

    Normally, bonds have a fixed interest rate and investors can find themselves out of pocket if they redeem them early and the market price is less than their initial price.

    The interest rate for Singapore Savings Bonds will be linked to the long-term Singapore Government Securities (SGS) rates. But unlike SGS bonds, which pay the same interest rates every year, the new product will start with smaller interest rates that will keep rising the longer you hold on to it.

    Singapore Savings Bonds will be transferable to beneficiaries if a bondholder dies, Mrs Teo said.

    Mr Liang Eng Hwa (Holland-Bukit Timah GRC) and Mr Patrick Tay (Nee Soon GRC) asked if the Government might consider issuing inflation-linked bonds. Mrs Teo said the Singapore Savings Bonds will offer a safe savings option for individuals while also allowing them the flexibility to redeem their bonds in any given month. While the bond is not inflation-linked, the full redemption feature allows bondholders to mitigate the risks of soaring inflation and higher interest rates, she said.

    When market interest rates fall, bondholders will benefit. On the other hand, when interest rates rise, bondholders can make use of the early redemption feature to redeem their bonds. They can then reinvest the proceeds in the new issues. Interest received on the bonds will be tax exempt, she added.

    [email protected]

    - See more at: http://www.straitstimes.com/news/sin....99sFKdK6.dpuf

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    Default Re: Singapore Savings Bonds: 8 things you should know

    This should be a good place to park your spare cash.

    Interest rate for 1st year is already 0.9%, better than most deposit accounts. And if you keep it longer than 1 year, u will get 1.5% for 2nd year.

    You will have the flexibility to withdraw money anytime, and guranteed to redeem at par value + interest accrued.

    You will need to look at the actual interest rates of these bonds when they are launched, and compare to bank deposit rates such as CIMB starsaver or SCB E-saver etc.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by Gigo88 View Post
    This should be a good place to park your spare cash.

    Interest rate for 1st year is already 0.9%, better than most deposit accounts. And if you keep it longer than 1 year, u will get 1.5% for 2nd year.

    You will have the flexibility to withdraw money anytime, and guranteed to redeem at par value + interest accrued.

    You will need to look at the actual interest rates of these bonds when they are launched, and compare to bank deposit rates such as CIMB starsaver or SCB E-saver etc.
    yes . agree. and also

    A key feature of the product is that a bondholder can get his money back in any month with no penalty imposed. This means investors do not have to decide upfront the duration of their investment.

    i will shift my emergency fund to this account.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    If you owe the garmen money can they seize your Savings Bonds just like they can invade your bank account money ??

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by Reddog View Post
    If you owe the garmen money can they seize your Savings Bonds just like they can invade your bank account money ??
    this one i dunno.

    didn owe garment any money.only they owe me my cpf.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    储蓄债券可通过自动提款机购买

    个人投资者今年下半年可通过自动提款机,申请购买政府推出的新加坡储蓄债券。政府将在每个月的首个工作日, 宣布当月的债券发行量。
    授权政府新加坡储蓄债券(Singapore Savings Bond)的政府证券(修正)法案昨天在国会三读通过。财政部兼交通部高级政务部长杨莉明在对修正案提出二 读时,对未来发行的储蓄债券,实施转让和抵押限制,作出了详细说明。
    今年发行储蓄债券或介于20亿至40亿元
    她透露,在未来五年或更长的时间,政府将按照需求每月发行新债券。今年,政府可能发行介于20亿元至40亿 元的储蓄债券。
    金融管理局昨天也公布更多关于如何购买和赎回新加坡储蓄债券细节。它的文告说,这项新的政府证券计划希望为 个人提供“长远、回报率稳当且灵活的储蓄选择”。
    将参与储蓄债券发行的银行是星展银行/储蓄银行、华侨银行和大华银行。在任何一个月份,个人将可以用最少5 00元申请债券,银行将征收交易费。
    在最初阶段,每人每月可以申请高达五万元的储蓄债券,并在任何时候可持有最多10万元储蓄债券。政府在推行 计划一段时日后,观察是否有必要检讨这个顶限。
    - See more at: http://www.zaobao.com.sg/special/out....Rmv31tzC.dpuf

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by GG789 View Post
    if i invest 50000, then i will get 12k

    no compound interest??
    Yes. 50k investment will yield 12k return over 10 years. No compound interest. Interest should be paid twice a year, like the current SGS.

    The interest rates shown is just an illustration. Do check the actual interest rates on offer during launch.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by Gigo88 View Post
    Yes. 50k investment will yield 12k return over 10 years. No compound interest. Interest should be paid twice a year, like the current SGS.

    The interest rates shown is just an illustration. Do check the actual interest rates on offer during launch.
    ok, update again in this thread once it launch.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    i think it is good for those who has set aside a certain amount of emergency fund.

    we do keep our emergency fund in saving bank account with little interest rate / no interest rate.

    might as well shift to this bond. just wondering how many working days they need to take to proceed for the bond sales. and we able to get back the money.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by Gigo88 View Post
    This should be a good place to park your spare cash.

    Interest rate for 1st year is already 0.9%, better than most deposit accounts. And if you keep it longer than 1 year, u will get 1.5% for 2nd year.

    You will have the flexibility to withdraw money anytime, and guranteed to redeem at par value + interest accrued.

    You will need to look at the actual interest rates of these bonds when they are launched, and compare to bank deposit rates such as CIMB starsaver or SCB E-saver etc.
    The low interest rates they are giving with these bonds can't even keep up with the inflation in Spore

    The US are going to start raising their rates this year & I won't be surprise if the rates eventually exceed 3%. The PAP has traditionally kept the interest rates low in Spore. Don't expect them to change this policy. So Sporeans are screwed if they keep their $ in Spore banks.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    MAS on how to apply for Singapore Savings Bonds

    The Monetary Authority of Singapore expects the first Savings Bond to be issued in the second half of 2015, and new bonds will be issued every month.

    SINGAPORE: The first Singapore Savings Bond is expected to be issued in the second half of 2015, and the Monetary Authority of Singapore (MAS) on Monday (May 11) released more information on how investors can buy and redeem them.

    The Savings Bonds are a new type of Singapore Government Securities designed to offer individuals a "long-term, flexible savings option with safe returns", MAS said in a news release.

    The launch of the bonds programme will be announced at least one month before applications for the first issuance open, MAS stated. New bonds will be issued every month for at least the next five years, added Senior Minister of State for Finance Josephine Teo in Parliament on Monday.

    Those interested in applying for the bonds will need to have a bank account with participating banks, currently DBS, POSB, OCBC or UOB. Prospective investors will also need to have an individual Central Depository (CDP) Securities account with direct crediting service, allowing payments to be made directly to a bank account.

    Individuals who wish to buy the bonds must be at least 18 years old, and have the necessary bank and CDP accounts before the bonds are launched, said MAS.

    Investors will be able to apply for and redeem the Savings Bonds through DBS, POSB, OCBC or UOB ATMs, or through DBS/POSB internet banking channels. Non-refundable transaction fees will be charged by the banks for each application and redemption request.

    APPLICATION, REDEMPTION PERIODS

    A new Savings Bond will be issued monthly, and applications will open on the first business day of each month, and close four business days before the end of the month. Requests to redeem existing bonds can be made during the same period, added MAS.

    Requests to buy or redeem the bonds will be processed three business days before the end of the month. The Savings Bonds will be issued on the first business day of the next month, and the redemption proceeds will be processed by the second business day.

    The investors will be notified by mail if their application requests are successful, and when the redemption requests are processed.

    ALLOCATION OF BONDS

    MAS will announce the issuance size of each Savings Bond issue before application opens. If the bonds are oversubscribed for the month, MAS will allocate the bonds to all applicants in increasing multiples of S$500, until the individual gets the full amount applied for, or when all available bonds have been allocated, whichever comes first.

    “This means that smaller applications will have a higher chance of receiving full allotment, and individuals with larger applications may not get the full amount they applied for,” explained Mrs Teo.

    Individuals will only be able to buy the bonds using cash, and application and redemption requests must be made in multiples of S$500.

    Investors will be able to apply for each Savings Bonds issue with amounts ranging from S$500 to S$50,000, and they can hold up to S$100,000 of Savings Bonds at any point in time. The Government will review the caps if there is a need for it, after the programme is implemented, said Mrs Teo.

    For 2015, the Government could issue between S$2 billion to S$4 billion of Savings Bonds, added Mrs Teo.

    The money raised from issuing the Savings Bonds cannot be spent by the Government and will be invested, said MAS.

    'STEP-UP' INTEREST RATES

    The Singapore Savings Bonds will pay investors “step-up” interest rates – which mean each year’s interest payment will be larger than the one before.

    “In the first year, the total interest payments results in an annual interest equivalent to that of conventional one-year Singapore Government Security (SGS),” explained Mrs Teo. “And if a bond-holder redeems the bond after five years, the average earned interest per year will match the return of a five-year SGS issued at the point of purchase.”

    “By the end of the tenth year, the total interest payments results in an average annual interest equivalent to that of a conventional 10-year SGS issued at the point of purchase,” she added.

    The investors will be paid interest every six months, and they will be able to keep the money even if they redeem the bond before the full tenure. They will receive the interest payment in the bank account that is linked to the CDP Securities account.

    MAS will announce the interest payment schedule and the returns over different holding periods, when applications open for each Savings Bonds issue. It has published a list of frequently asked questions on Singapore Savings Bonds on its website.

    - CNA/xq

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Govt bonds = govt borrowing money from you.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    Quote Originally Posted by Gigo88 View Post
    This should be a good place to park your spare cash.

    Interest rate for 1st year is already 0.9%, better than most deposit accounts. And if you keep it longer than 1 year, u will get 1.5% for 2nd year.

    You will have the flexibility to withdraw money anytime, and guranteed to redeem at par value + interest accrued.

    You will need to look at the actual interest rates of these bonds when they are launched, and compare to bank deposit rates such as CIMB starsaver or SCB E-saver etc.
    But if you are a bit more savvy and willing to tolerate some risks, I would think that buying a 10 year SGS would be a better deal than this Singapore Savings Bond.

    1. Both are design to give the same yield over 10 years. SGS will pay you the same interest every year for 10 years, whereas SSB (Singapore Saving Bond) will have a step up interest, paying a lower interest in the early years, and higher interest in the later years.

    2. Under normal circumstances, a 5 year bond will always have a lower yield compared to 10 year bond. If you have bought a 10 year SGS at launch and keep it for 5 years (ie. after 5 years, it is the same as a 5yr bond), and assuming no major movement on the interest rates, then you should be able to sell it above par value, yielding some return on capital invested.

    Let me give an example. Few years ago, I bought a 10 year SGS bond paying coupon interest rate of 2.25% (The actual yield is slightly higher as I got it below par). It still have about 6 years to maturity. Should I choose to sell it now, I should be able to get back 100% of capital invested, and maybe a little bit more.

    In the 4 years, I could have collected (2.25% x 4 years) - 9% of capital invested. Under the SSB, I definitely will have collected less interest in the 4 years, as it is designed to pay lower interest in the initial years.

    Of course, there are downsides to buying SGS.

    1. Rising interest rates will have impact on SGS prices. You will get less than 100% par value should you choose to sell in such an environment.

    2. There are commissions involved in selling, although I am not sure how much is the commission.

    3. The market may not be liquid (ie. no buyers) or only have buyers willing to buy at a big discount.

    Just my 2 cents opinion.

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    Default Re: Singapore Savings Bonds: 8 things you should know

    2 to 3 percent yield?

    Over such a long period?

    Hahahahahahahahahahahahaha

    No wonder LKY said Sinkie ARE daft and need spurs on their hides! LoL

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