Singapore Savings Bonds - More Details

As you have probably read last week that the Government and MAS (Monetary Authority of Singapore) are planning to introduce a new type of bonds catered to retail investors, it is called Singapore Savings Bonds.

Today, MAS released more details about Singapore Savings Bonds and thought it will be a good idea to summarize some of the key points I read so far. There are more details to be disclosed by MAS at a later date but for now, check out the details below :

What Is It? 

Singapore Savings Bond

Who Is It For? 

Individual Retail Investors

When Will It Be Launched? 

Second Half Of 2015

What Are The Key Features?

a. Principal guaranteed

b. Flexible Redemption on monthly basis (no penalty for early redemption)

c. Long term savings/investment (up to 10 years)

d. Step-up Interests (i.e. the interest rate increases over time) ; Paid every 6 months

(source : mas.gov.sg)

e. Monthly Issuance but non-tradable (i.e. cannot be bought or sold in secondary market)

f. Minimum Investment Amount : SGD 500 and subsequent multiples of SGD 500, up to a cap to be announced at a later date.

How Much Returns Can You Get? 

If you hold your Savings Bond for the full 10-year term, the average interest per year on your investment will match the return if you had invested in a 10-year SGS at the point of your investment. In the last 10 years, the 10-year SGS yield has been between 2% to 3% most of the time. (source : mas.gov.sg)

If you need more details about Singapore Savings Bonds, you can check out the fact sheet from MAS here. 

Personally, I think it will be a good alternative for parking our emergency fund (which we might need to withdraw unexpectedly) or just for building up the retirement fund in a risk-free way. 

What is your view about Singapore Savings  Bond?

Cheers!