The Monetary Authority of Singapore (MAS) announced on Tuesday that the Singapore Savings Bonds (SRS) will be issued on 1 October 2015 and interested investors will be able to apply for the bonds from 1 September onwards.
MAS said that a new Savings Bond will be issued every month thereafter and added that the Singapore Savings Bonds are a new type of government bond that offers individual investors a safe, long-term and flexible product to meet their savings and investment needs.
On 1 September 2015, MAS will publish a public notice to provide information on the 1 October 2015 Savings Bond issue, including the amount on offer and the interest pay-out schedule from the 1st to the 10th year.
The notice will be published after 4.30pm on the Savings Bonds website (www.sgs.gov.sg/savingsbonds). This information will also be made available in local newspapers the following day. Investors should note the following:
|Applications open||1 September 2015, 6.00pm|
|Applications close||25 September 2015, 9.00pm|
|Application results||28 September 2015, after 3.00pm|
|Issue date||Successful applicants will receive their Savings Bonds in their Central Depository (CDP) accounts on 1 October 2015.|
|Apply through||DBS/POSB, OCBC or UOB ATMs; or
DBS/POSB internet banking
In order to apply for Savings Bonds, individuals must have a bank account with participating banks, namely DBS/POSB, OCBC or UOB and an individual CDP Securities account with direct crediting service (DCS) enabled1.
A new Savings Bond will be issued every month for at least 5 years, so there is no need to rush for the first issuance. The Singapore Government plans to issue S$2-4 billion of Savings Bonds this year.
Jacqueline Loh, MAS deputy managing director, said impact of the Singapore Savings Bonds on the banking sector will be low. Non-bank deposits of Singapore banking sector is over S$500 billion. MAS expects to issue S$2 billion to $4 billion worth of the bonds in 2015 depending on demand. The overall cap on individual investor is S$100,000, while the cap on any single issue is S$50,000.
A bondholder can get his or her money back at any time, with no penalty imposed. This means investors do not have to decide upfront on the duration of their investment.
This is unlike conventional bonds where an investor who sells the bond before its term ends is exposed to the fluctuating market price and may get less than the principal amount.
Investors can find out more information on MAS’s Savings Bonds website at: www.sgs.gov.sg/savingsbonds. Members of the public can call the Savings Bonds hotline at 6221-36822 to find out more about the programme.