Singapore Savings Bonds: Everything You Need to Know

Monetary Authority of Singapore (MAS) first introduced Singapore Savings Bonds in Sep 2015 to provide an alternative ‘risk-free’ bond instrument to Singapore Government Bonds (SGS). As of Feb 2017, more than 37,000 people have invested more than $1 billion so far. SSB has been becoming more popular with retail investors towards end 2017, start 2018 because of increasing short term interest rates. The short term rates are as attractive if not more than fixed deposits.

On this page, you will learn about Singapore Savings Bonds – its characteristics, how SSB differs from SGS bonds, why invest in SSB, how to invest in SSB and how to apply for Singapore Savings Bonds.


Characteristics of Singapore Savings Bonds

Let’s get started. Here’s a quick description of SSB for those who are new to this bond product.

  • 10-year maturity
    • Suitable for long term saving
  • Bonds are redeemable monthly
    • Invested funds are liquid and can be withdrawn within a month’s notice.
    • Impact of rising interest rates can be mitigated
  • Increasing coupon yield (eg. 1%pa for first year, 1.3%pa for second year..)
    • Coupons for the 10 years are locked-in at issuance
    • Coupons are paid semi-annually
  • Non-traded
    • Investors do not need to worry about bond capital appreciation or depreciation based on interest rates
  • Fully backed by the Government of Singapore
    • ‘Risk-free’, sovereign-backed bond
  • Denominated in units of S$500
    • Investors can invest up to S$100,000 in SSB across all issues
    • Investors can invest a maximum of S$50,000 per issue
  • Issued monthly

Delving deeper, it is important that readers learn about Singapore Savings Bonds versus Singapore Government Bonds. SGS bonds have been issued by MAS for a long time and they are considered vanilla plain-Jane bonds. SSB and SGS bonds serve different purposes in one’s portfolio.

Singapore Savings BondsSGS Bonds
Maturity10 years2, 5, 10, 15, 20, 30 years
CouponIncreasing yieldConstant yield
Coupon paymentSemi-annual
Selling/RedeemingBonds can only be sold back to MAS ($2 transaction fee to redeem/partially redeem bonds)Bonds can only be sold on secondary market SGX (standard brokerage transaction costs)
Custodian of Invested BondsCentral Depository (CDP)
IssuerGovernment of Singapore
Investment amountIn multiples of S$500
Max S$50,000 per issue
Max $100,000 across all issues
In multiples of S$1,000

Why Invest in Singapore Savings Bonds?

Finally, I will try to answer the burning question of Why Invest in Singapore Savings Bonds?

Safest ‘Risk-Free’ Bond

SSB is fully backed by the Government of Singapore which holds the highest credit rating from major credit rating agencies (eg. S&P’s AAA rating). Economically, since the Government of Singapore also influences monetary policy (money printing), there is no reason they cannot return the invested funds.

SSB is also insulated from volatility of interest rates since they are not traded. And because investors can redeem bonds directly with MAS, there is no capital loss in the event interest rates rise.

Good liquidity with No Redemption Cost

The Singapore Savings Bonds can be sold back to MAS in any month with no penalty or transaction cost. This is good liquidity. Even though SGS bonds are traded daily on SGX, they often do not trade with high volume. Firstly, tradablity is poor and secondly, bid-ask spreads are high so investors are penalised when selling bonds. In that sense, investors can turn to SSB as a credible ‘risk-free’ bond alternative.

Suitable for all investors

Statistics published by MAS in Feb 2017 agree that SSB is popular with all ages. 44% of bondholders are aged 48 and above while 40% are between 31 and 47 years old. For younger investors with less savings, this is an excellent product to begin your bond investment journey – investors can buy SSB in multiples of S$500.

Most notably, reference portfolios featured in Save & Invest Portfolio Series on Straits Times all feature SSB. They were chosen by a 26-year old working adult, a 39-year old family man and a 63-year old retiree.

Investment Portfolios with Singapore Savings Bonds

How to Invest in Singapore Savings Bonds?

There is no perfect way to invest in the SSB but here are just some suggestions how investors can kick-start their bond journey with these bonds.

Start Savings Programme

Singapore Savings Bonds were introduced by MAS to encourage Singaporeans to save for the long term. By lowering the minimum investment amount to S$500, issuing bonds monthly, MAS clearly wants investors to treat SSB as a savings programme. Investors can start small and consistently put money on a monthly, bi-monthly or even a semi-annual basis. To reap the full benefit of the step-up coupons, investors should refrain from redeeming the bonds early but hold them until maturity.

Tip: Ideal strategy for passive investors with low risk appetite.

Park Cash During Low Interest Rates

Consider buying Singapore Savings Bonds in a low rate environment as an interim avenue to store cash. SSB is liquid and can be redeemed in any month. If rates rise, you can simply sell the bonds back to MAS, redeem your funds and invest them in a higher interest rate product.

Tip: For more savvy investors with an opinion that rates will remain stagnant or fall.

SGS bonds can provide capital appreciation but they suffer from liquidity issues as they are traded in low volume on SGX whereas fixed deposits tend of have higher interest rates but incur early redemption penalty if you redeem them early. Do learn the characteristics of these investment products before deciding what is right for you. Business Times Singapore has a great infographic explaining the differences between SSBs, SGS bonds and fixed deposits.

Diversify Portfolio

Investors should not possess only equities and real estate in their portfolio. Bonds can help to reduce portfolio volatility to achieve an optimal risk-reward ratio. SSB is an excellent tool for this purpose. SSB provides a steady predetermined income stream over 10 years. By not having them publicly traded, MAS has provided a bond for stability. Investors do not have to worry about daily fluctuations in bond price.

Tip: Diversification is key to a complete and robust portfolio. Fixed income investment is necessary to reduce portfolio volatility. I recommend adding SSB and fixed deposits is your portfolio.

How do I Apply for Singapore Savings Bonds?

Interested investors can apply for SSB during the application period in the month. Singaporeans, PRs and foreigners can apply. The mode of application is cash only. As of Mar 2017, MAS is studying the possibility of allowing investors buy SSB using their Supplementary Retirement Scheme funds.

Interested investors have to possess a Central Depository (CDP) account to store bond scripts electronically. This is the same depository that stores your equity scripts bought on SGX. If you have not opened one, you must apply for one via securities trading platforms or directly with CDP.

Timeline to Note

Here’s a quick infographic regarding the process of application. You can get more information on the application process on the Singapore Savings Bonds website too. Do not miss out on the application deadline – 4th last business day of the month!

How do I Receive my Coupon Interest Payments?

Bondholders will receive coupon payments every 6 months. It is paid on the 1st business day of the month when due. This interest will be automatically credited to the bank account linked to your CDP account.

How do I Redeem my Singapore Savings Bonds Early?

SSB can be redeemed in any month before maturity. Although strongly encouraged not to redeem early due to step up coupons, investors can do so at almost zero commission. The bonds can also be redeemed partially in denominations of S$500. You will receive the redeemed amount together with the proportionate accrued interest(in the case of partial redemption for that half year).

Bondholders should submit bond redemption through the same application channels: ATM and internet banking. Banks charge a $2 processing fee, similar to the fee for bond application. Below is an illustration of the redemption timeline. If you require more information, head here for a detailed redemption FAQ provided by MAS.


Last updated: 29 Jan 2018