The Government and Monetary Authority of Singapore (MAS) will introduce the new Singapore Savings Bonds (SSB), a type of Singapore Government Securities (SGS) for local individual investors, Senior Minister of State for Finance and Transport Josephine Teo said at the annual conference of the Investment Management Association of Singapore (IMAS) on Thursday.
Like the Singapore Government Securities (SGS), which are bonds introduced by the Government since the 1960s, the new SSB are safe investments, principal-guaranteed by the government.
The SSB will have two features that will make them more attractive for individual investors.
First, holders of the SSB can get their money back in any given month, with no penalty, and earn interest that is linked to long-term SGS rates. This means that investors do not have to decide upfront how long they wish to invest.
Secondly, unlike bonds that pay the same coupons each year, the SSB pays coupons that 'step-up' or increase over time. As a result, the effective coupon rates are higher the longer the bonds are held.
Ms Teo said the Government hopes that the Singapore Savings Bond programme will encourage individuals to save and invest to meet their long-term financial goals and retirement needs.
More details of the programme will be released later as the Government and MAS are still working on it.
To help educate investors, the national financial education platform, MoneySENSE, has been providing broad-based financial education to Singaporeans. This year, it will will intensify its investor education efforts, with a focus on simple low-cost products.