5 Things You Need To Know About Singapore Saving Bonds (Explained In Layman’s Terms)


So, the Monetary Authority of Singapore (MAS) has decided to introduce the new Singapore Saving Bond (SSB) and the internet has been buzzing ever since.

However, many people are still lost regarding the benefits and the features of the Singapore Saving Bond as most of the articles are written in financial language, making even the simplest financial instrument sound more complex than it actually has to be!

So over here at WealthMastery.sg, we are going to do you a favor by simplifying the benefits of the Singapore Saving Bond down to its essence. And we will attempt to explain all of these in layman’s terms!

1) The SSB Is Principal Guaranteed By The Singapore Government

What this basically means:  It is risk free and you will get back the full amount you have invested in case anything happens.

2) Flexible Redemption Without Penalty

What this basically means: In the case of banks, if you withdraw your fixed deposit before it is due, e.g. withdrawing on the 3rd year when your fixed deposit has a 5 year term, you normally have to pay a penalty.

Unlike the fixed deposits, you can sell your Singapore Saving Bonds anytime on a monthly basis without the need to pay any penalty. This is great news for people who are afraid to commit their money for the long haul.

3) The Interest Rates Are Linked To Singapore Government Bond Yields

What this basically means: If you hold on to your Saving Bond for the full 10-year term, you will earn a yield of 2% to 3% per year (because the yield of a 10-year government bond for the last 10 years has been between 2% – 3%). If you choose to redeem your Singapore Savings Bond early, e.g. after 2 years, you will get the equivalent yield of a 2-year government bond.

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4) Interest Rates Will Step-Up Each Year

What this basically means: The longer you hold on to your Saving Bond, the higher the amount of interest you receive, the more money you will make.

5) Low Minimum Investment Amount

What this basically means: You can purchase Singapore Saving Bond with amounts starting as low as $500. They are sold in multiples of $500, up to a cap. The cap would be announced closer towards the launch date.

Featured Image Credits: straitstimes.com

How do you think that the introduction of the Singapore Savings Bond is going to change the investment landscape in Singapore?

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