Singapore Government Savings Bonds

For the next 5 years, the Singapore Government will be issuing Savings Bonds every month. The monies collected will be used for investments. Unlike Singapore Government Securities (SGS), these Savings Bonds cannot be traded.

Below are some key points on the Singapore Government Savings Bonds:

1. What do I need to buy Singapore Government Savings Bonds?

• A bank account and ATM card with UOB/OCBC/DBS/POSB
• An individual CDP account (individuals must be at least18 years old) linked to the bank

2. How can I make an application?

• Via ATM or internet banking for POSB/DBS account holders
• On 1^st work day up to 4^th last work day of the month
• Money will be deducted at point of application, unsuccessful applications will be returned on 2^nd last work day into the bank account that was used to make the application
• Successful applications will be credited into CDP on 1^st work day of the issue month
• Each transaction fee is $2
• Important dates of each issuance can be viewed on the calendar
• Minimum investment is $500, and in multiples of $500 up $50,000 for each issue. The maximum amount held across all issues cannot exceed $100,000.

3. How can I make redemption?

• Via ATM or internet banking for POSB/DBS account holders
• On 1^st work day up to 4^th last work day of the month
• Principal and accrued interest will be credited into the CDP-linked bank account on the 2^nd work day of the following month
• Each transaction fee is $2
• Minimum redemption is $500, and in multiples of $500 up to the total amount invested.

4. Tell me more about the interest payment.

• Interest rates are stepped-up interests with increasing interest as the bond is held until maturity. Interest rates for each Savings Bond issue is available here
• Interest payments will be directly credited into the CDP-linked bank account on 1^st business day of 6^th month and 12^th month
• The interest rates of each Savings Bond issue are based on the average Singapore Government Securities (SGS) yields the month before applications for that issue open

5. At maturity, the principal and last interest payment will be directly credited into the CDP-linked bank account. There will be no $2 transaction fee.

For any particular issue, if the total amount of applications exceeds the amount of bonds available, one will not get the full amount of bonds applied for. In the worst case scenario, if one is not even allotted the minimum amount $500, the $2 transaction fee is lost. And at 1% interest rate, if one is allotted the minimum $500, the holding period should be at least 1 year in order to break even and start to accumulate interest.