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Singapore could potentially issue between S$2b to S$4b in new savings bonds

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THE Singapore government could potentially issue between S$2 billion and S$4 billion of the new Singapore Savings Bonds, depending on demand, said Senior Minister of State for Finance Josephine Teo in parliament on Monday.

THE Singapore government could potentially issue between S$2 billion and S$4 billion of the new Singapore Savings Bonds, depending on demand, said Senior Minister of State for Finance Josephine Teo in parliament on Monday.

The non-tradable bonds - which is a key design of the bonds to protect individuals from capital loss - are a new type of Singapore Government Securities (SGS) designed to offer individuals a long-term, flexible savings option with safe returns. They are expected to be launched in the second half of 2015.

Individuals who wish to invest in savings bonds should ensure that they have the necessary bank and CDP accounts over the next few months before the bonds are launched. According to the Monetary Authority of Singapore, the central bank will announce the programme launch date at least one month before applications for the first issuance open.

For a start, each person can apply for up to S$50,000 per issue, and can hold up to S$100,000 of the savings bonds at any time. The government will review these caps in due course.

"This will meet the needs of the vast majority as more than 90 per cent of individual bank deposit accounts have balances of S$100,000 or lower,'' MAS said.

Ms Teo said, "It is the Government's intention to enable all individuals to have access to the Savings Bonds. There is therefore no need to rush to buy these bonds.''

If the total applications exceed the total issuance size in a particular month, the MAS will allocate bonds to all applicants in increasing multiples of S$500.

The allocation to each individual will stop when the individual gets the full amount applied for, or when all the available bonds have been allocated, whichever comes first.

"This means that smaller applications will have a higher chance of receiving full allotment, and individuals with larger applications may not get the full amount that they have applied for,'' she said.