Singapore Savings Bonds programme set to be launched in 2H15: MAS

The minimum investment amount is $500.

The Monetary Authority of Singapore will launch the the Singapore Savings Bond (SSB) programme in the second half of the year.

The SSB was first announced last week by Senior Minister of State Josephine Teo, who noted that the programme is an effort to provide individual investors with a long-term savings option that offers safe returns.

Only individuals can apply for and hold the Savings Bonds. Under the SSB, investors will always get their investment amount back in full, which means that they will not suffer any capital losses. Its term of ten years also allows individuals to save for the long term and receive higher long-term interest rates.

Investors who hold the SSB will earn interest that is linked to long-term Singapore Government Securities (SGS) rates. Unlike SGS that pay the same coupon each year, Savings Bonds will pay coupons that “step-up” or increase over time. As a result, the average interest rate is higher the longer the Savings Bonds are held.

The SSB will be issued monthly to make it accessible on a regular basis. It also features a flexible redemption scheme which allows bond-holders to get their money back in any given month with no penalty.

The SSB features a small minimum investment amount of $500, and in subsequent multiples of $500 up to a limit which will be announced at a later date.

MAS will provide information on how to apply for Savings Bonds closer to the launch date.