Apply for S'pore Savings Bonds from tomorrow

Interest growing for product as MAS, DBS receive many inquiries

The wait for investors is over - Singapore Savings Bonds (SSB) open for applications tomorrow.

Interest seems to be growing for the product, with the Monetary Authority of Singapore (MAS) and DBS Bank receiving many calls on the bonds. At 4.30pm tomorrow, MAS will post a notice on the Savings Bonds website at detailing the amount of bonds on offer and the payout schedule.

Applications open at 6pm on the same day and you can lodge your request through ATMs of DBS and POSB, OCBC Bank or United Overseas Bank. But you will need an account with those participating banks and an individual Central Depository (CDP) account with direct crediting service. There is a $2 non-refundable transaction fee for each application .

It takes around two weeks to set up a CDP account with direct crediting service activated.

The minimum application amount is $500 for each bond issue with the maximum at $50,000. Individuals can hold only a maximum of $100,000 worth of SSBs.

The bonds are issued for 10 years but are flexible in that they can be redeemed in any month before maturity with no penalty.

Successful applicants will get their bonds on Oct 1.

If your application is unsuccessful, the money goes back to your bank account. However, application fees and charges will still apply.

The Government will issue $2 billion to $4 billion worth of the 10-year bonds this year with a new batch released every month.

The bonds are issued for 10 years but are flexible in that they can be redeemed in any month before maturity with no penalty. The yield will be about the same as that of a Singapore Government Security.

A spokesman for DBS said that about half the calls it has been getting are from people over 47 years old.

This could indicate that some people see the bonds as a handy investment leading up to retirement.

The SSB inquiry centre and Savings Bonds website have also been used by those seeking more information, said a MAS spokesman, adding: "We advised that individuals should compare the features and risks of various (investment) products before making an investment decision.

"They could consider, for instance, their investment horizon, desired return versus acceptable risk, and the chance that they may have to sell or redeem their investment to meet unexpected needs for cash."

There is a large pool of potential investors, with about 69,000 new CDP accounts having been opened in the 12 months to June 30, according to the Singapore Exchange. This gives a total of 1.65 million account holders as at June 30.

A version of this article appeared in the print edition of The Straits Times on August 31, 2015, with the headline 'Apply for S'pore Savings Bonds from tomorrow'. Print Edition | Subscribe