Singapore Savings Bonds limit to be lifted from $100,000 to $200,000
The individual limit for holding Singapore Savings Bonds (SSB) has been lifted from $100,000 to $200,000, it was announced yesterday.
Investors will also be able to buy the bonds using funds from their Supplementary Retirement Scheme (SRS), a voluntary savings plan that enjoys tax relief.
Both changes take effect from Feb 1 next year, the Monetary Authority of Singapore (MAS) said yesterday.
The announcement followed calls from the public to open the bonds, viewed by many as a safe investment, to SRS funds.
MAS said: "Taking into account public feedback, MAS has worked with the banks to enable SRS funds to be invested in SSB.
"This will expand the range of products available to SRS members and help them save and plan for retirement."
SSBs have had sustained interest since their launch in October 2015.
Demand has outstripped supply in every monthly SSB auction, except for one month.
The strong response has prompted the MAS to raise the amount of bonds for sale three times since April. The monthly issue now is $300 million, double April's $150 million.
Around 100,000 individuals have invested about $3.7 billion in the bonds since the 2015 launch, the MAS said.
Ms Selena Ling, OCBC Bank head of treasury research and strategy, said the revised SSB rules will definitely be welcomed by individual investors and likely lift overall demand for the bonds.
iFAST senior fixed income analyst Ang Chung Yuh agrees. He expects SSB subscription rates will rise significantly given that one-third of SRS funds reside in cash, which earns negligible returns.
By comparison, the 10-year SSB pays an average 2.45 per cent if held to maturity. - THE STRAITS TIMES