To make inexpensive investment options available to a wider variety of investors, a new government bond type will soon be available to retail investors in Singapore.
This investment product exhibits a unique feature, which is that holders of these bond types can secure a return from the bond during any month without penalty. This enables investors to cash in on their investment without any forethought when securing their investment, as typically bonds have an established interest rate. Cashing out these bonds that will be introduced very soon will save investors from reduced returns that often result from typical bonds when they are prematurely redeemed.
When will Singapore Savings Bonds be to investors?
Singapore Savings Bonds will be issued to investors on a monthly basis, beginning on October 1, 2015. Investors who have an interest in securing a Singapore Savings Bond are encouraged to begin applying for these investments on September 1, 2015.
How can I purchase a Singapore Savings Bond?
One can both apply for and redeem Singapore Savings Bonds at a DBS Bank ATM, a POSB Bank, a OCBC Bank or a United Overseas Bank, or over the internet via DBS/POSB through their banking portal online.
Both applications and redemption requests are required to be made in $500 multiples. These are cash transactions. Investors require a bank account with a bank participating in the program, as well as a Central Depository Securities Account that features direct deposit service, which permits any bond payments to be directly deposited into your account.
How much am I allowed to invest?
Singapore Savings Bonds are geared towards small retail investors, who can invest at least $500 with additional denominations that occur in $500 increments that cap at $50,000 during a single issue.
What return amounts can I expect?
Bond interest is associated with long-term SGS rates. While Singapore Government Security Bonds pay the same amount of interest yearly, Singapore Savings Bonds pay with vouchers that grow in value over time. Average interest investors will gain returns while they hold Singapore Savings Bonds, matching the proceeds investors would have received had they purchased bought an SGS bond of equal value. A 10-year SGS has yielded 2-3 percent at most over the past 10 years.
The interest rate schedule for each Singapore Savings Bond issue will be prior to application submission acceptance, and these bonds will be issued monthly.
I’d prefer to invest in Singapore Government Securities (SGS). How do I achieve this task?
Individual investors are required to hold an existing individual Central Depository (CDP) account in order to invest in Singapore Government Securities. The least denomination in which one can purchase an SGS is $1,000 and one can invest in further securities in denominations of $1,000. SGS are issued by auction to the investment market. One can purchase Singpore Government Securities either at primary auctions or in the secondary market. To learn more, visit SGS.gov.sg.