SRS transactions – If you want to invest in SGS bonds in the secondary market with SRS funds, you must link your SRS account to your brokerage account and opt to pay for the transaction with SRS funds. Transaction and brokerage expenses would be incurred if SGS bonds were traded on the SGX.
What is the procedure for purchasing an SGS bond?
To apply for the CPFIS, go to the main branch of your respective CPF Investment Scheme (CPFIS) agent bank (DBS/POSB, OCBC, or UOB). For SGS bonds and T-bills, the minimum bid amount is S$1,000. Decide how much you want to invest in S$1,000 increments.
Is it possible to purchase Singapore savings bonds using SRS?
Is it possible for me to buy Savings Bonds? Yes, as long as you have an individual CDP or SRS account and a bank account with DBS/POSB, OCBC, or UOB in Singapore, you can buy Savings Bonds.
Should I invest in SGS bonds?
For such investors, SGS bonds should be considered a feasible option. They’re beneficial when you’ve got some spare cash that you can’t risk in higher-risk investments. A normal investor would leave the money in fixed deposits or savings accounts in this situation.
Important information
- Make sure you have an individual (not joint) CDP Securities account linked to your DBS/POSB account via Direct Crediting Service before you begin (DCS).
- Each Savings Bond issue’s application period begins at 6 p.m. on the first business day of the month and ends at 9.00 p.m. on the fourth business day of the month.
- Only Monday through Saturday, from 7:00 a.m. to 9:00 p.m., is the application available (excluding public holidays).
- Each application request will be charged a non-refundable transaction cost of S$2.
How to Apply for Singapore Savings Bonds
You can apply for Singapore Savings Bonds through a variety of sources. The most practical method is to use digibank Online.
What exactly is the distinction between SGS and SSB?
Both are government debt products, but the SSB is being introduced to make the SGS more accessible to ordinary investors (mom and pops especially). To put things in perspective, the SSB minimum is $500, whereas the SGS minimum is $1000. The actual method used to compute the SSB rates can be found on the website, and it is based on the average SGS yields from the previous month. SSB’s annual returns for a single month’s issue fluctuate from year to year. Returns on SGS are affected by the economy and the length of time till maturity. The annual returns on SGS bonds are fixed for the life of the bond.
-Types of SGS: 1) Invoices (less than 1 year to maturity) Bonds (No. 2) (more 1 year to maturity, up to 30 years)
Liquidity is a difficult concept to convey, but I’ll do my best. You must sell your bond on the SGX/secondary market for SGS. You can’t sell it if there isn’t a willing buyer. You must also determine whether the selling price is one you are willing to accept, taking into consideration the transaction and brokerage expenses you will incur. Before the transaction is completed, there is a period of waiting. You can redeem your SSB early, but your money will only be refunded to you the next month, thus whether you redeem on July 2 or July 27, you will only get your principle back in August. You’ll also have to pay $2 if you want to redeem your ticket early. Although neither instrument is particularly liquid, I believe SSB is still quite good.
Both are low-risk, with SGS receiving a AAA rating. Because SSB is based on SGS, its rating can also be regarded as AAA.
How does the SSB interest get paid?
Yes, you can apply for SSBs with your SRS funds (you cannot, however, use CPF funds to invest in SSBs).
Submit your SSB application through your participating SRS operators’ ibanking sites (DBS/POSB, OCBC, or UOB). The minimum application amount is $500, and a $2 transaction charge will be debited from your SRS accounts for each application, much like cash applications.
In December 2018, the MAS increased the Individual Limit for SSB from $100,000 to $200,000 due to the inclusion of SRS funds. This restriction applies to the total number of SSBs on hand at any given time.
How do I buy a Singapore Savings Bond?
- Any of the participating banks (Citibank, DBS/POSB, OCBC, HSBC, Maybank, OCBC, Standard Chartered Bank, and UOB) has a bank account.
- Through the Direct Crediting Service, an individual SGX Central Depository (CDP) account is linked to your participating bank account (DCS)
Consider your participating bank account to be a place where you keep your cash, and your CDP account to be a separate account where you keep your stocks and bonds.
You can apply for an individual CDP account through your participating bank or any brokerage firm in Singapore. More information on how to open a CDP account may be found here.
You can apply for SSBs using your participating bank’s ATMs or ibanking portals if you have a CDP account. At the time of application, monies will be taken from your account.
You’ll need to create an SRS account first. You can use DBS, OCBC, or UOB to open one (aka your SRS operator).
SRS money will be allocated at the time of application if you apply using your SRS operator’s ibanking portal.
Important periods to watch out for
Applications are accepted from 7:00 a.m. to 9:00 p.m., Monday through Saturday, from the 1st to the 4th business day of each month (excluding Public Holidays). Every application request will be charged a non-refundable $2 transaction fee by participating banks.
On the 3rd final working day of the month, known as Allotment Day, the MAS will distribute the new SSBs to applicants.
You may not receive the full amount you applied for if the overall number of applications exceeds the amount available in a given month. On the 2nd final business day of the month, you will be repaid any remaining funds. The first business day of the following month, SSBs will be issued.
If you made a cash investment, you will receive a letter from CDP informing you of the amount of SSB you have been allocated. You can also verify your SSB holdings on the CDP website or by phoning 6535-7511 (toll-free).
If you invested with SRS money, you will receive a letter from your SRS operator informing you of the amount awarded to you. You can also ask your SRS operator about your SSB holdings.
Otherwise, you can keep track of your combined SSB holdings via the Singapore Savings Bonds internet portal.
The first interest payment will be credited to the bank account that is linked to your CDP or SRS account six months after the SSB is issued.
After that, interest will be paid every six months on the first business day of the month, and it will appear on your CDP or SRS statements.
Why is there a difference between my Applied and Allotted amount of Singapore Savings Bonds?
It’s possible that the total number of SSBs applied for in a given month will surpass the available supply. If this occurs, MAS will distribute SSB funds using the ‘Quantity Ceiling’ format.
This essentially means that each applicant is given a minimum of $500 to begin with. The ‘ceiling’ is then raised in $500 increments until the total SSB amount is allowed.
For example, if only $10,000 of SSBs are available but MAS receives $18,000 in applications, the money will be distributed as follows:
What is the best way to invest in SRS DBS?
What should you do with your SRS savings?
- Stocks, exchange traded funds (ETFs), unit trusts, Singapore Savings Bonds (SSBs), insurance, and fixed deposits can all be purchased with your SRS.
What is the SRS account interest rate?
A Supplementary Retirement Scheme (SRS) account could be an important aspect of your retirement financial planning. This is largely due to the tax benefits that voluntary contributions provide. If you stop at the account opening stage, you may be selling yourself short. This is because money left in the SRS account earns only 0.05 percent per year in interest.
Why you shouldn’t leave your SRS account idle
In a single word, inflation. The value of our money depreciates as a result of inflation. A dollar could purchase four cups of coffee in the 1970s. Even a single cup can be difficult to get by these days. Similarly, when you withdraw your SRS funds, products would be more expensive.
According to SRS statistics, idle cash accounted for 25.9% of total SRS contributions (S$3.17 billion) as of the end of December 2020.
Unlike CPF funds, which yield 2.5 percent per year, SRS funds have a set interest rate of 0.05 percent per year. Maintaining your retirement savings and putting money aside for rainy days is probably not a good idea. This is especially true for people who have a lengthy time until they may begin taking their SRS funds penalty-free at the age of 62.
As a result, investing your money is critical if you want to remain ahead of inflation and get the benefits of compounding over time.
When will I be able to get my SRS?
You can withdraw money from your DBS SRS account at any time before reaching the age of 62, but there is a 5% penalty for doing so. For that year, 100 percent of the amount withdrawn will be liable to tax.
What is the procedure for redeeming SGS bonds?
- Select Redeem Singapore Government Securities from the Manage Investments menu (SGS).
- Choose whether you want to redeem for Singapore Savings Bonds Cash or SRS. Next should be selected.
- Check your personal information and enter your Redemption Amount. Next should be selected.