You can consider setting aside a portion of your money into the Singapore Savings Bonds (SSB). Being completely backed by the Singapore government with a credit rating of “AAA” (the strongest rating), SSB is one of the safest investments you can consider with minimal risks involved.
For bonds bought in January 2023, the interest rates range from 2.95% - 3.63% which are much higher than in previous months.
Here are some of the interest rates from the past to compare.
6 months ago (July 2022): 1.69% - 3%
12 months ago (January 2022): 0.45% - 2.44%
18 months ago (July 2021): 0.36% - 3.04%
24 months ago (January 2021): 0.27% - 1.64%
Click here to find out the current month’s bond details.
At the beginning of each month, the Monetary Authority of Singapore (MAS) will announce the interest rates for the entire 10-year term of that particular month’s bond. The interest rate increases every year and is based on the average Singapore Government Securities (SGS) yield for the previous month. The longer you hold your bond, the higher effective return you receive.
To track your interest payments, you do so by logging in via My Savings Bond portal.
The 2 ways you can apply are either using cash or Supplementary Retirement Scheme (SRS) funds.
For cash applications:
Have a bank account with any one of these banks (DBS/POSB or OCBC or UOB)
Have a Central Depository (CDP) securities account with direct crediting service activated (to receive interest payments)
Apply via ATMs or interest banking portals (find the option to invest in SSB)
Select your preferred bank account to receive interest payments
Keep the receipt / take a photo of the completed application
For SRS applications:
You will need a SRS account from either DBS/POSB or OCBC or UOB
Apply through the internet banking portal
SRS funds will be locked when you apply
*Note: There is a non-refundable $2 charged by the bank for each application request (both cash & SRS).
This is the day the government releases the results on the website about the final amount you are allocated. The results can be viewed after 3pm on the 3rd last business day of the month.
In the event that the total amount of applications exceeds the amount offered for that month, you may not be able to receive the full amount you have applied for. You will be refunded for the difference by the 2nd last business day of the month. (Note: The $2 application fee is non-refundable)
So how are the funds allocated based on the situation mentioned above? All the applicants will receive in multiples of $500 until 1) the remaining amount cannot be equally distributed to everyone or 2) an applicant has already received the amount they applied for (whichever comes first). Subsequently, multiple of $500 will be distributed randomly to the rest of the applicants who have yet to receive the full amount they applied for.
Therefore, those applying for a lower amount would have a higher chance of receiving the full amount.
How to redeem what you have earned?
Click here to find out how much you can earn!
At the end of 10 years, the principal amount and final interest are automatically transferred to the bank account linked to your CDP account or SRS account. (The $2 fee is not applicable here.)
If you would like to redeem before the bond matures in 10 years, you can submit a request by the closing date via 1) DBS/POSB or OCBC or UOB internet banking or ATMS (for cash) or 2) online SRS operator (for SRS). There is no penalty for exiting early so do not worry!
From 6pm on the 1st business day of the month until 9pm on the 4th last business day of the month
Monday to Saturday (excluding public holidays), 7am-9pm
The redemption amount is in multiples of $500 and you can redeem more than 1 bond per month. There is a $2 transaction fee by the bank for each redemption request made. You will receive the amount by the 2nd business day of the following month.
If you redeem when there is a scheduled interest payment, you will receive the scheduled interest with the principal amount. However, if you redeem before the scheduled interest payment, you will only receive the prorated amount (also known as accrued interest).
For instance, you bought the bond in January and should receive your interest payment in July. If the redemption request was made in June, you will receive the full interest. However, if the redemption request was made in March, you will only receive half the amount.
Overall, SSB offers higher interest rates as compared to fixed deposits and insurance savings plans (eg. Singtel Dash PET). Furthermore, you can have a peace of mind knowing that your hard earned money is safe and you get access to it whenever you wish without any penalties.