The Government is open to the idea of allowing Singaporeans to use funds from their Supplementary Retirement Scheme (SRS) account to buy Singapore Savings Bonds (SSB). But the additional benefit of such a move may not be worth the cost, Minister for Education (Higher Education and Skills) Ong Ye Kung said in Parliament yesterday.
The SSB is a risk-free financial instrument offered by the Government, while the SRS is a voluntary retirement savings programme that complements the Central Provident Fund system.
Members can contribute varying amounts to the SRS as often as they wish to - subject to a yearly cap - before Dec 31 each year, and use the money in the account to invest in approved instruments.
Responding to a question by Mr Patrick Tay (West Coast GRC), Mr Ong, who was speaking on behalf of Deputy Prime Minister Tharman Shanmugaratnam, said the Government has indeed been studying the option of allowing Singaporeans to use funds from their SRS to buy SSB.
However, he noted that there is a cost involved in making this channel available.
"We have to assess whether it can benefit a sufficiently broad segment of people. As of now, the additional benefits are not clear since SRS monies can already be invested in Singapore Government Securities, which offer the same returns as savings bonds if held to maturity," he said.
Mr Tay had also asked if the current purchase limits of SSB could be raised. Currently, the maximum investment amount for each SSB issue is $50,000 and the maximum individual holding is $100,000. Mr Ong said these limits "are not cast in stone", but added: "However, so far, only a small minority of Savings Bond investors have reached the boundaries of these limits."
Only one in five applicants, on average, requests for the maximum of $50,000 of a given issue. Fewer than 7 per cent of investors are near or have reached the $100,000 overall limit, he said. "We will monitor the take-up for some time before considering whether raising the limits would benefit a broad proportion of savers."