How Singapore Savings Bonds work, and what happens when you want your money back

A retired civil servant keeps a small spreadsheet on the kitchen computer. One column lists the bank fixed deposits she has rolled over for years; another, newer column lists Singapore Savings Bonds. What she likes about the second column is not the rate, which changes every month, but the rules: she knows exactly how to get the money back and how long it takes.

This guide explains those rules as the Monetary Authority of Singapore (MAS) sets them out. It does not recommend buying or holding Savings Bonds, or any other product. Whether they suit anyone depends on that person’s needs and the rate on offer at the time.

What a Savings Bond is

Singapore Savings Bonds (SSBs) are a special type of Singapore Government Securities, issued by the Government of Singapore and designed for individual investors. MAS describes them as fully backed by the Singapore Government, with no capital loss: you always get your investment amount back in full. Unlike conventional bonds, they cannot be bought or sold on the open market, traded on SGX or pledged as collateral, and they cannot be transferred except in specific situations such as the death of the holder.

A new bond is issued every month, each with its own interest rates for its whole term of up to 10 years.

The key numbers

Source: MAS, Investing in Savings Bonds. Rates for each issue are announced at the start of the month it opens.

How the step-up interest is set

Each issue’s interest rates are based on the average Singapore Government Securities yields of the month before applications open. The rate for the first year is the lowest; it then rises, or “steps up”, year by year. MAS says the coupons are set so that the average annual return over any holding period, say five years, is linked to the yield on a government bond of the same tenor. If you hold for the full 10 years, your return matches the average 10-year SGS yield of the month before you invested.

MAS’s own illustration, explicitly labelled as such, uses S$1,000 invested in July 2015: S$9 of interest in the first year, S$15 in the second and S$33 in the tenth, for an effective return of 2.4% a year over 10 years, the average 10-year SGS yield in June 2015. Leaving early means a lower average return, because the higher later coupons are never reached.

Once a Savings Bond is issued, interest rate changes have no effect on the bond’s value.

Buying: the monthly window

To apply, you need a bank account with one of the three local banks, DBS/POSB, OCBC or UOB, and an individual CDP Securities account. Applications go through those banks’ ATMs, internet banking or mobile apps. Money in the Supplementary Retirement Scheme can also be used, through the SRS operator’s channels.

According to MAS, details of each new issue, including the amount available and the interest rates, are announced on the first business day of the month. Applications open at 6pm that day and close at 9pm on the fourth-last business day of the month. Allotment results are announced on the third-last business day, and any unallotted money is refunded by the end of the second-last business day.

Getting your money back

This is where Savings Bonds differ most from a fixed deposit. You can ask to redeem in any month, with no penalty. Redemption requests are accepted from the first business day of the month until the fourth-last business day, and you receive the principal and any accrued interest by the second business day of the following month. MAS’s example: a S$1,000 redemption requested in May is paid, with accrued interest, by the end of the second business day in June. Redemptions must be in multiples of S$500.

At maturity nothing needs to be done. MAS notes that the first bonds began maturing in 2025, and that principal and the final interest payment are credited automatically to your bank account linked to CDP, or to your SRS account.

Good to know

Because redemption takes up to about a month, Savings Bonds are not instant-access money. For a sudden bill, money that can be withdrawn at once is still needed.

How Savings Bonds differ from bank deposits

Savings Bonds are backed by the Government itself. Singapore-dollar bank deposits are protected differently, by deposit insurance up to S$100,000 per depositor per bank, as explained in why S$100,000 is the number to know about your bank deposits. The two are not interchangeable: deposits can usually be reached immediately, while Savings Bonds pay a rate fixed for each issue but take up to a month to come back. Interest on Savings Bonds is also exempt from tax.

The bonds also sit outside any government handout. Buying one is a personal decision, not a scheme you qualify for, and no website needs your Singpass or bank login to “reserve” one. Applications are made only through the banks’ own channels.

Who this matters for, and what to check

• Savers who value a fixed exit route: any month, no penalty, paid early the next month.
• Retirees or people nearing retirement: MAS points to Savings Bonds as one way to keep the value of savings, alongside other options.
• Anyone comparing rates: check the current issue’s rates on the MAS website; past rates say nothing about the next issue.
• Large savers: the S$200,000 cap is per person and covers all your Savings Bonds together.
• Anyone who receives an unsolicited offer “for government bonds”: the only route is through DBS/POSB, OCBC or UOB channels.

The takeaway

Savings Bonds are simple once the calendar is clear: apply within the monthly window, receive interest twice a year, redeem in any month and expect the money by the second business day of the next. They are government-backed and tax-free, but not instant-access, and the rate depends entirely on the month you buy. If you are protecting savings against scams as well as rates, see our guide to Money Lock and the 24-hour hold.