Achieving financial freedom and securing your retirement largely depends on building a portfolio of income-generating assets that provide a steady stream of passive income. A low-cost income investment portfolio is an essential component of retirement planning.

Among the investment options available to strengthen your income portfolio is the Singapore Savings Bond (SSB), which offers increasing interest rates with virtually no risk of capital loss, making it a compelling alternative to T-bills.

Additional reading: 4 Cash Alternatives to Invest in for Retirement When the Stock Market Is Volatile

What is Singapore Savings Bonds (SSB)?

SSB is a subset of Singapore Government Securities (SGS), offering a safe and flexible investment option for individual investors. Buyers can enjoy increasing returns over time and the freedom to redeem bonds in any month without penalties.

Not only can you invest in SSB using cash, but you can also do so with your Supplementary Retirement Scheme (SRS).

The latest issuance of Singapore Savings Bonds

This month’s Singapore Savings Bond, SBJAN24 GX24010F, has an Issue Date of 02 Jan 2024 and a Maturity Date of 01 Jan 2034.

The SSB has an interest rate of 3.00% to 3.27% per annum with two semi-annual payments, and an average yearly return of 3.07% if you hold the bond for 10 years.

Here’s a table illustrating the interest % for investors based on the duration of their SSB investments:

This previous month’s bond, SBDEC23 GX23120Z, had an interest rate of 3.30% to 3.68% per annum, and the 10-year average return of 3.4% is the highest among issuances in 2023. Below is the table for November SSB.

Want to keep track of the new issuance of future Singapore Government Bonds? Subscribe to our newsletter using the form below, and we’ll keep you updated.

Are Singapore Savings Bonds Safe?

SSB is arguably one of the safest products on the market. The Singapore Government’s “AAA” credit rating and near-complete government backing reduce investment risks to a minimum.

Fixed Deposit, Singapore Savings Bonds and Singapore Government Bond

The Savings Bond combines features of a fixed deposit and a regular government bond. Notably, the early redemption feature, the long tenure and step-up coupons make for a unique offering. Below is a comparison table compiled by Business Times.

Source: Business Times

How to Invest in Singapore Savings Bonds (SSB)?

SSB is open to individuals aged 18 years and above. If this is your first time applying for SSB, we’ve got you.

Investing in SSB is straightforward:

  • Cash
  • Supplementary Retirement Scheme (SRS)

Please note that you CANNOT invest in SSB with your CPFIS.

Additional Reading: Complete guide to CPF Investment Scheme (CPFIS)

Step 1: Preparation

Make sure that you have the following ready before your SSB application

  • A bank account with any local banks in Singapore (DBS/POSB, OCBC or UOB)
  • Central Depository (CDP) account that is linked to the bank account you intend to invest with.

Step 2: Application

MAS will announce details of the upcoming Savings Bond issue (such as the amount available and interest rates) on the 1st business day of each month.

There are 2 ways you can invest your SSB with:

  • Apply through ATM (only DBS/POSB, OCBC, or UOB), OR
  • Apply through Internet Banking under Singapore Government Securities.

Note that you’ll need to have your CDP Account Number on hand when making the application.

Step 3: Allocation

After applying for SSB, you don’t need to do anything. Just remember these two important dates:

  • Closing Date: Apply before this date.
  • Allotment Date: The results will be announced on this date.

In case of over-subscription, you’ll receive a portion of your applied amount, with the rest automatically returned to your bank account.

Is There a Limit to Singapore Savings Bonds Subscriptions?

Indeed, there are limits. The minimum investment is $500, with subsequent investments required in denominations of $500.

While each application is capped at $50,000, your total Savings Bonds holdings cannot exceed $200,000 at any time.

How do you redeem your SSB?

Redeem when Your Bond Matures

Each Savings Bond has a 10-year term. If you wait until the end of the 10 years without withdrawing your SSB early, your principal and the last interest payment will be automatically credited to your bank account linked to your CDP account (for cash applications) or to your SRS account (for SRS applications).

You don’t need to take any action, and there’s no $2 transaction fee.

What if you want to redeem it early?

Alternatively, you can redeem your Savings Bonds in any given month before maturity, with no penalty for exiting your investment early. Redeem in multiples of $500 up to your invested amount for each bond and redeem more than one bond per month.

However, a $2 transaction fee applies for each redemption request.

To redeem, submit your request by the closing date through the following channels:

  • Cash investments – DBS/POSB, OCBC and UOB internet banking or ATMs, and OCBC’s mobile application.
  • SRS investments – Redemption requests for Savings Bonds purchased with SRS funds can only be made online through your SRS Operator.

The redemption period opens on the 1st business day of each month and closes on the 4th last business day of the month. You will receive your redemption proceeds along with any accrued interest by the 2nd business day of the following month.

How are interest rates for Savings Bonds determined?

According to MAS, SSB interest rates are linked to the yields of Singapore Government Securities (SGS). As SGS are traded, the yields of SGS fluctuate daily based on changes in market conditions.

The SSB on offer in any given month is linked to the daily average SGS yields as published by MAS in the previous month. The investor’s average annual compounded return over any period (e.g. 5 years) should broadly correspond to the SGS yield of the same holding period (e.g. 5-year SGS).

The interest rates and returns on SSB are therefore determined by the market and will fluctuate according to changes in market conditions, albeit with a one-month lag.

There may be two exceptions to this:

  1. The first exception is due to very small rounding differences of up to +/- 0.03% that may arise in the computation of average returns for Savings Bonds.
  2. The second exception may arise from time to time if the shape of the SGS yield curve does not allow the interest rates to step-up. In such instances, the design of the Savings Bond prioritises the “step-up” feature of the interest rates over the matching to SGS yields for a given year. This is because the objective of the Savings Bond programme is to encourage and facilitate long-term savings and investment. An adjustment is made so that the interest payments do not step down in any year. This adjustment does not affect the return on the Savings Bond if it is held for the full 10 years.

This is the reason that even if we were facing an inverted yield curve in the past year, SSB continues paying step-up interests.

Curious about calculating your interest earnings each year? There’s a calculator where you can experiment!

Source: MAS

You can click this link to access the calculator.

How to check what Savings Bonds you have?

If you’ve opted for cash subscriptions, your SSB allocation and the corresponding interest payments will be clearly indicated on your CDP account statement. Moreover, you can expect to receive semi-annual CDP statements in both June and December every year, provided you maintain holdings within your CDP account.

You can see what bonds are held in your CDP account through:

  • CDP Internet service
  • CDP Call Centre (6535-7511), or
  • View your CDP account statement sent to your mailing address (if you are subscribed to it)

You can also check the bonds held in your SRS account through the internet banking portal of your SRS Operator if you have opted for SRS subscriptions.

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About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

  • What an informative guide to Singapore Savings Bonds (SSB)! This article breaks down everything from how they work to how to purchase them, making it easy for beginners like me to understand. The comparison with other investment options is particularly helpful. Thanks for simplifying such a complex topic!

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