Should you invest in Singapore Savings Bond
It’s crucial that you invest to have a secure and safe future. Investing your money enables you to double its value and gain a return on it. Having investments is crucial if you don’t want to have a comfortable future due to smart investments you have made in the past.
However, the question always arises – Where should you invest?
Singapore Savings Bond is a basic investment option available to the public. In fact, it’s considered a standard investment in Singapore.
What is Singapore Savings Bond?
Launched on 1st October, 2015, the Singapore Savings Bond is a security offered by the Singapore Government which is accessible to public, individual investors. They are a part of Singapore Government Securities. Singapore Savings Bond works like a Singapore Savings Fixed Deposit. The government’s aim is to offer investors access to a long-term interest investment with great flexibility.
The bond is issued on the first day of every month and investors receive a regular interest payment every six months. The longer the investment period, the higher the interest payment.
Why should you invest in Singapore Savings Bonds?
Secure and Low Risk
Singapore Savings Bonds is secured and back by the Singapore government. Additionally, these bonds are principal-guaranteed investments backed by the triple A rating. This rating signifies a very low risk of default. If you are looking for safe investment, then Singapore Saving Bond is an appropriate option.
Flexible
As mentioned before, Singapore Savings Bond offers great flexibility. Investors are able to get their money back at any time, without any consequences or financial penalty. For example, if a life emergency requires you to access a lump-sum fund, you can withdraw your investment from these bonds without experiencing a financial penalty.
High Returns
The longer an individual maintains the investment, the higher the interest she will receive. Below is the current forecast if you invest $500 in your account.
In case, you don’t withdraw the bond for 10 years, you are looking at an interest of slightly over $100, with an effective return of 2.11% return per year.
The interest rate of the Singapore Savings Bonds varies. It is dependent on the economy and the time period you keep it. When the bond is issued by the Singapore Government at the beginning of the month, the bonds are assigned the interest rates. Here’s a look at the interest rate assigned for the bonds of March, 2018.
Easy to Apply for Singapore Savings Bond
It’s not difficult to apply for your own Singapore Savings Bond. The requirements are quite basic.
- Have a bank account with one of the following banks: DBS/POSB, OCBC and UOB
- Have an individual Central Depository Securities account
Low Amount Barrier
In fact, investing in Singapore Savings Bond does not require a large amount. It starts at $500 and can go upto $50,000.
All of these elements make Singapore Saving Bond one of the most secure and easiest investments to make.
How Long should you Invest?
While the bond tenor is 10 years, you do not have to maintain that investment period. The obvious answer to the above question is that the longer you invest, the higher your return.
Whether you are thinking of withdrawing your investment after a year or 5 years, you can use Singapore Savings Bond’s rate calculator to estimate your return. In fact, this way you can make a decision on how long you would like to invest for.
Singapore Savings Bond is probably the safest investment available in the country that’s easily accessible. It can be compared to a fixed deposit, except it offers better security. In case, you are planning to invest in Singapore Savings Bond – you are making the right choice.
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