SINGAPORE: The Government and Monetary Authority of
Singapore (MAS) are planning to introduce a new type of bonds to help
individual investors get a better return on their savings, Senior
Minister of State for Finance Josephine Teo said on Thursday (Mar 26).
Speaking at the annual conference of the Investment Management Association of Singapore (IMAS), Ms Teo said the planned Singapore Savings Bonds will be safe investments with principal guaranteed by the Government.
These bonds will have two features to make them more attractive for individual investors: The ability to get his or her money back in any given month with no penalty, and interest rates that are linked to long-term Singapore Government Securities rates.
Unlike bonds that pay the same coupon each year, the Singapore Savings Bonds will pay coupons that “step-up” or increase over time, providing investors with a higher return the longer they hold the bonds, she added.
"In short, the Singapore Savings Bonds will offer the higher returns of a long-term bond and give what investors call a term premium, while retaining the flexibility of a shorter-term deposit, and the safety of an instrument guaranteed by the Government," she said.
Ms Teo said the Government and MAS are still working on the details and will release more information later.
Speaking at the annual conference of the Investment Management Association of Singapore (IMAS), Ms Teo said the planned Singapore Savings Bonds will be safe investments with principal guaranteed by the Government.
These bonds will have two features to make them more attractive for individual investors: The ability to get his or her money back in any given month with no penalty, and interest rates that are linked to long-term Singapore Government Securities rates.
Unlike bonds that pay the same coupon each year, the Singapore Savings Bonds will pay coupons that “step-up” or increase over time, providing investors with a higher return the longer they hold the bonds, she added.
"In short, the Singapore Savings Bonds will offer the higher returns of a long-term bond and give what investors call a term premium, while retaining the flexibility of a shorter-term deposit, and the safety of an instrument guaranteed by the Government," she said.
Ms Teo said the Government and MAS are still working on the details and will release more information later.
- CNA/ac
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Our portfolio management for lifelong retirement income getting interesting?
ReplyDeleteYes, provided the returns is 4% and above
ReplyDeleteMore than 3% will cause bank run on CPF. Massive withdrawal from CPF OA and SA. So many CPF members are 55 and above.
DeleteOverall interest rates, including bank deposits rate and CPF, are likely to be higher than now. That's why govt can roll out this savings bond in due course.
ReplyDelete