What Is Singapore Savings Bond, And How Does It Work? 

‍Singapore Savings Bonds (SSBs) are savings products issued by the Central Provident Fund (CPF). These are high-rate fixed-term deposit accounts that can yield higher returns than ordinary savings accounts. These bonds were first introduced in 1961, and they currently have three types: Singapore Individual Savings Account, Singapore Supplementary Retirement Savings Account, and the more recently launched Global Saver Account. These are called savings bonds because they don’t pay interest or dividends.

 They just give you a guaranteed annual return of at least 1% per annum until maturity, subject to market conditions. To earn this guaranteed return on your SSBs, an amount is automatically contributed to your account each month from your salary or profits from self-employment or capital gains from selling certain assets such as stocks and properties. In other words, these accounts work like a high-interest savings account but with a lot more flexibility. Read on to learn more about what these accounts are, how they work, and the potential risks involved if you decide to invest in them.

What Is Singapore Savings Bond?

In short, SSBs are savings products issued by the CPF. These are high-rate fixed-term deposit accounts that can yield higher returns than ordinary savings accounts. These bonds were first introduced in 1961 and had three different types: Singapore Individual Savings Account, Singapore Supplementary Retirement Savings Account, and the more recently launched Global Saver Account. These are called savings bonds because they don’t pay interest or dividends. Instead, they just give you a guaranteed annual return of at least 1% per annum until maturity, subject to market conditions. 

To earn this guaranteed return on your SSBs, an amount is automatically contributed to your account each month from your salary or profits from self-employment or capital gains from selling certain assets such as stocks and properties. In other words, these accounts work like a high-interest savings account but with a lot more flexibility.

How Does Singapore Savings Bond Work?

These accounts work like high-interest savings accounts but with a lot more flexibility. In other words, these accounts work like a high-interest savings account but with a lot more flexibility. They have three different types, as mentioned above: Singapore Individual Savings Account, Singapore Supplementary Retirement Savings Account, and the more recently launched Global Saver Account. The first type of account, the Singapore Individual Savings Account (SISA), is an individual saving scheme that is geared toward individuals who are looking to save tax-free for their retirement. 

The second type of account, the Singapore Supplementary Retirement Savings Account (SRS), is designed for people who are not yet self-employed or retired and still want to contribute to their retirement fund without sacrificing principal. The third type of account, the Global Saver Account (GSA), is more tailored toward global investors as it offers higher interest rates than regular SSBs. GSA participants can earn up to 2% interest on their investment. These accounts are administered by your employer or yourself through your business bank account at any of the banks listed on the CPF website. 

The first type of account, the Singapore Individual Savings Account (SISA), is an individual saving scheme that is geared toward individuals who are looking to save tax-free for their retirement. The third type of account, the Global Saver Account (GSA), is more tailored toward global investors as it offers higher interest rates than regular SSBs. GSA participants can earn up

Pros of Singapore Savings Bonds

Just like every other financial service, SSB has its cons, and here are a few: 

• High return on investments.
• Flexible investment options that allow you to decide when and how much you want to invest.
• No risk of losing principal as the bonds are guaranteed up to maturity for a certain interest rate.
• You can use this money for any purpose, whether it’s paying off debts or saving for retirement.
• There are tax breaks if used correctly. Cons: 
• There is no guarantee of a fixed rate of 1% per annum since they depend on market conditions.

Step-By-Step Guide to Investing in SSB

The first step to investing in SSB is to open a CPF Account with the Central Provident Fund. This account is where all your contributions will be made. Once you have opened your account, you can go ahead and invest in a Singapore Savings Bond. There are three types of SSBs:

• You can purchase an individual savings bond for yourself or as a joint account holder up to the maximum of $150,000.
• A supplementary retirement savings bond can be purchased by an individual who has reached age 55 and has at least 10 years of continuous employment before that date.
• The Global Saver Account is designed for people who are not Singapore citizens or permanent residents. 

You can invest in either individual or joint holdings of these bonds. The money you invest will be deposited directly into your CPF account and then transferred into one of these three categories as applicable. These bonds pay out interest every year until maturity at a fixed rate of 1% per annum, subject to market conditions. You can withdraw from your investment on maturity at any time before this date without paying any fees or penalties. If you have earned more than the minimum guaranteed return on your investment, you can also withdraw any amount over this amount without incurring any fees or penalties.

How do I withdraw a Singapore savings bond?

Since these bonds are fixed-term deposits, you won’t be able to withdraw your money early. To get your money out, you need to wait until maturity. Withdrawals are allowed once a year at the end of the bond’s term.

What is the interest rate for SSB?

The interest rate for SSB is 2.0% per annum, payable monthly and compounded annually. This means if you invest $10,000 in SSBs with a maturity period of five years, this will give you an annual return of $200.

How to Open a Singapore Savings Bond

If you want to open one of these SSBs, the first thing you’ll need to do is fill out an application form and provide some personal information. You’ll also need to provide proof that your income meets the eligibility requirements for opening the account. Once your application is approved, you can choose between the three types of bonds: Singapore Individual Savings Account (SIS), Singapore Supplementary Retirement Savings Account (SSRA), and Global Saver Account (GSA).

 To start earning interest on your SSBs, you will need to deposit at least $5 per month into the account through either salary deduction or by, self-employment or capital gains. After a few months, this money will be added up with other depositors’ funds and invested in fixed-term deposits that are low risk and high-yielding.

How Does Singapore Savings Bond Work?

 The principle behind these accounts is that your contributions are automatically deposited into an account when you make them (i.e., when you earn them). The money will grow with time until it matures in 20 years. Your money can be transferred back to your personal bank account before its maturity date if you want to take out cash or use the money for other purposes.

 What Are The Risks Involved? 

There are some risks involved with investing in SSBs, including low liquidity and not being able to withdraw the investment before it matures without incurring additional charges for early withdrawal and taxes for non-residents of Singapore.

Wrapping Up: Is Singapore Savings Bond right for you?

Singapore Savings Bonds are high-rate fixed-term deposit accounts, which means you get a guaranteed return of 1% per annum until maturity. These accounts work like high-interest savings accounts but with a lot more flexibility. 

We hope the information in this article has been helpful to you as it was carefully researched and put together to ease your decision. Remember that whether or not to invest in these is all up to you. Before choosing to invest, we advise you to carry out proper research. Good luck!