SINGAPORE - ABOUT 32,000 individuals have invested S$810 million in the Singapore Savings Bonds (SSBs) since they were made available to retail investors in September 2015.
The lion's share of investment comes from those who are aged 49 and above, accounting for almost half or 46 per cent of all investors.
Nearly two out of 10 were new Central Depository account holders, suggesting that SSBs were their first foray into securities investments.
This is according to the Monetary Authority of Singapore (MAS), which provided updated information on SSBs today.
SSBs are targeted at retail investors who want higher interest than bank deposits but are leery of putting their savings at risk.
By setting the minimum application amount at $500, SSBs are available to even investors who have small amounts to invest. Indeed, MAS highlighted that half or 49 per cent of all applications are for sums below $10,000.
A significant 13 per cent were young investors aged 18 to 30.
MAS added that the SSBs have helped to increase retail participation in the Singapore government bond market. Currently, 2,000 retail investors hold a total of S$300 million of conventional Singapore Government Securities (SGS).
MAS said that these are encouraging developments as SSBs are intended to be a safe, flexible and long-term instrument that would be suitable for new investors.
MAS said: "As they become more familiar with investing, these first-time investors could consider other instruments for long-term investment, including equities, bonds, exchange traded funds and unit trusts.
"We also hope to promote greater awareness of the Savings Bond and its features among investors saving towards retirement or who are retiring. The safety and flexibility of Savings Bonds means that they can form part of an investor's portfolio to complement equities and bonds."
Financial experts say that it is not surprising to find more retirees investing in SSBs as they would typically wish to take less risk while seeking to preserve their savings and receive interest income.
In line with the declining average 10-year SGS yields, the SSBs average annual interest rates across the past six issues have generally fallen.
The average interest rate of the first six issues was 2.63 per cent, 2.78 per cent, 2.44 per cent, 2.5 per cent, 2.58 per cent and 2.09 per cent.
