Up to $2b of Savings Bonds up for grabs

Applications opened yesterday for the first issue of Singapore Savings Bonds (SSBs) for next year. Up to $2 billion of these bonds - a safe investment option aimed at retail investors - will be offered next year, said the Monetary Authority of Singapore (MAS).

The latest issue promises an average annual return of 2.18 per cent for those who hold the instrument for the full 10 years. It is the first time in the past few months that the average annual return exceeds 2 per cent.

Up to $150 million of the bonds will be available in the first issue next year, with applications closing at 9pm on Dec 27.

In response to queries, the MAS said it has issued $276 million in SSBs this year, adding: "The maximum issuance size is a limit and not a target. We have revised the issuance size for 2017, taking into account the subscription amounts in 2016."

The MAS also disclosed that since the launch of the programme in September last year, 35,000 individuals across all age groups have invested $987 million in 15 SSB issues.

Unlike regular bonds, SSBs offer accrued returns to investors who redeem the bonds ahead of the full 10-year tenor. The bonds are not tradable and so are not affected by market fluctuations and are capital-guaranteed.

The individual limit for this issue is $50,000, and the individual holdings limit across all SSBs is $100,000.

Interested investors must have an individual Central Depository (CDP) securities account and need to have activated the direct crediting service. The CDP helps investors keep track of their SSB holdings and facilitates the crediting of interest payments into bank accounts.

Applications can be lodged via the automated teller machines of DBS Bank, POSB, OCBC Bank and United Overseas Bank, or through the Internet banking portal of DBS and POSB. The issuance calendar can be found at www.sgs.gov.sg/savingsbonds

A version of this article appeared in the print edition of The Straits Times on December 02, 2016, with the headline 'Up to $2b of Savings Bonds up for grabs'. Print Edition | Subscribe