Singapore Savings Bonds or SSBs are one of the types of debt securities offered by the Singapore Government. These securities are fully-backed by the Singapore government and are best suited for individual investors. Savings Bonds Singapore gives higher returns than any other investment option.
These bonds work as an alternative to fixed deposits. Bonds are one of the most sought-after investments as they come with higher interest, and you are guaranteed to get your money back. Since bonds are like a public loan that government and other eligible financial institutions get, you can redeem your bonds and get your money back on maturity.
Some essential things to know about SSBs
Before you invest in SSBs, there are some points that you must know. It will help you understand more about savings bonds and will enable you to get rid of any misunderstandings that you may have about savings bonds in general.
Period of investment
Since bonds are a medium of debt capital for the government, they are just like any loans. In other words, bonds are loans the government gets from the public and have to repay within a specified time. Generally, the investment period is 10 years, and after maturity, your initial investment is returned. In the case of bonds, the repayment of the investment amount is called redemption.
No Loss in Capital
As we have established above, bonds can be redeemed after their maturity period, which will help you receive the money you have invested without any loss. The interest rates are fixed based on the SGS yield prevailing during the period. Therefore, the possibility of incurring a loss is very low.
Flexible redemption
Though the highest term for investing in SSB is 10 years, you can still redeem your bond prematurely within a month. Therefore, you do not have to commit your period of investment. However, the point to keep in mind is that the longer you invest, the higher the interest you will earn. It is advisable to have your portfolio with higher maturity bonds to maximize your earnings.
SSBs are non-tradable investments
One of the most common misconceptions regarding Singapore Savings Bonds is that they are tradable investments, which is not true. Tradable investments are those traded in the secondary market (stock exchange) or at stockbrokers’ places like DBS branches.
SSBs, on the other hand, can only be bought directly from the primary market where they are first issued. It means you cannot exchange these bonds for money with anyone else. The only way you can surrender your bonds is to redeem them.
Use your Supplementary Retirement Savings Funds
You can utilize your SRS finds to invest in SSBs and maximize your earnings. Singapore Government Securities allow using SRS funds to buy SSBs. Being a retirement voluntary scheme, SRS enables you to accumulate your savings and allows you to have funds to invest. If you are depositing in SRS, it is a great opportunity to earn income by investing your SRS funds in Singapore Savings Bonds.
SSBs are a great way to earn income while ensuring that your money is safe. You will get your yield every six months until you redeem your bonds. Moreover, you do not have to invest thousands of dollars together. The minimum amount you need to invest is 500 SGD, and increase it with multiples of 500. Singapore Savings Bonds offer great opportunities for investors to invest their hard-earned money and earn income from it.
