ABOUT 32,000 individuals have invested S$810 million in the
Singapore Savings Bonds (SSBs) since they were made available to
retail investors in September 2015.
The lion's share of investment comes from those who are aged 49 and
above, accounting for almost half or 46 per cent of all
investors.
Nearly two out of 10 were new Central Depository account holders,
suggesting that SSBs were their first foray into securities
investments.
This is according to the Monetary Authority of Singapore (MAS),
which provided updated information on SSBs today.
SSBs are targeted at retail investors who want higher interest than
bank deposits but are leery of putting their savings at risk.
By setting the minimum application amount at $500, SSBs are
available to even investors who have small amounts to invest.
Indeed, MAS highlighted that half or 49 per cent of all
applications are for sums below $10,000.
A significant 13 per cent were young investors aged 18 to 30.
MAS added that the SSBs have helped to increase retail
participation in the Singapore government bond market. Currently,
2,000 retail investors hold a total of S$300 million of
conventional Singapore Government Securities (SGS).
MAS said that these are encouraging developments as SSBs are
intended to be a safe, flexible and long-term instrument that would
be suitable for new investors.
MAS said: "As they become more familiar with investing, these
first-time investors could consider other instruments for long-term
investment, including equities, bonds, exchange traded funds and
unit trusts.
"We also hope to promote greater awareness of the Savings Bond and
its features among investors saving towards retirement or who are
retiring. The safety and flexibility of Savings Bonds means that
they can form part of an investor's portfolio to complement
equities and bonds."
Financial experts say that it is not surprising to find more
retirees investing in SSBs as they would typically wish to take
less risk while seeking to preserve their savings and receive
interest income.
In line with the declining average 10-year SGS yields, the SSBs
average annual interest rates across the past six issues have
generally fallen.
The average interest rate of the first six issues was 2.63 per
cent, 2.78 per cent, 2.44 per cent, 2.5 per cent, 2.58 per cent and
2.09 per cent.
ST