Friday, 3 February 2017

Over $1 billion invested in Singapore Savings Bonds

By Rachael Boon, The Straits Times, 2 Feb 2017

More than 37,000 people have invested more than $1 billion since Singapore Savings Bonds (SSBs) were first offered in September 2015, said the Monetary Authority of Singapore (MAS) yesterday.

The MAS said in a statement: "The programme has appealed to small savers, with 55 per cent of all applications comprising investments of $10,000 and below."

The MAS data also showed that 21 per cent of investors wanted to invest an amount of $40,000 to $50,000 for each application.

Many SSB investors are older, with those aged 48 years and over comprising 44 per cent, while those between 18 and 30 years of age made up 16 per cent of investors.

Applications for the next monthly issue of SSBs opened yesterday and run until 9pm on Feb 23. Up to $150 million of the bonds will be available in this round.

This issue promises an average annual return of 2.38 per cent if held for the full 10 years, the second time in recent months that the average annual return exceeded 2 per cent.

The MAS previously said that up to $2 billion of SSB - a safe investment option aimed at retail investors - will be offered this year.

Unlike regular bonds, SSBs offer accrued returns to investors who redeem the product ahead of the full tenor.

The capital-guaranteed bonds are not tradable, so they are not affected by market fluctuations.

The individual limit for the new issue is $50,000, while the individual holdings limit is $100,000.



Investors must have an individual CDP securities account, with the direct crediting service activated, to apply.

The CDP helps investors keep track of their holdings and facilitates the crediting of interest into bank accounts.

Applications can be lodged via DBS Bank, POSB, OCBC Bank and United Overseas Bank (UOB) ATMs and the DBS and POSB Internet banking portals.

New channels have been added - such as OCBC's mobile application OneWealth and UOB and OCBC's online portals - after the MAS found "a significant number of investors" applying online.

Experts say these convenient channels are useful as SSB competes essentially in the same space as bank deposits.

"It's a lot easier to go down and put money in the bank as the three local banks are everywhere in the neighbourhood," said CIMB economist Song Seng Wun. "There's no big incentive or near- term gratification, even though it's better for you in the longer run and gives higher returns than in the bank.

The MAS will also provide regular e-mail updates to subscribers which will include information on the latest SSB interest rates.

Those interested can sign up from March 1 on www.sgs.gov.sg/savingsbonds, where the issuance calendar also can be found.



Related
More Application Channels for Singapore Savings Bonds

No comments:

Post a Comment