Yesterday, MAS released more details on the Singapore Savings Bonds that I wrote about earlier.
To apply, you will need two things:
Direct Crediting Service (DCS) allows you to credit your Singapore-dollar dividend payments or other cash distributions directly into your designated bank account. If you have been receiving your dividends in the form of cheques, that will mean you are not on the DCS yet.
Application can be done via ATM or internet banking. Bank charges may apply.
A new Singapore Savings Bond will be issued monthly. Applications for each Savings Bond issue will open on the first business day of each month and close four business days before the end of the month. Redemption requests can be made during the same period.
All application and redemption requests will be processed three business days before month’s end. Savings Bonds will be issued on the first business day of the next month and redemption proceeds will be processed by the second business day.
Individuals will be able to apply for each Savings Bond issue with as little as $500, and up to $50,000. Applications and redemption requests must be made in multiples of $500, In addition, individuals will be able to hold up to $100,000 of Savings Bonds at any point in time.
It’s good that MAS has decided to set quite a high limit.
In case of over-subscription, MAS will allocate the lowest amount ($500) to everyone. If there is surplus left, the next $500 will be allocated to everyone, and so on.
Here is one worked example:
The Government plans to issue up to $10,000 of Savings Bonds.
Four individuals A ($2,000), B ($4,000) C ($5,500) and D ($6,500) applied for a total of $18,000 of Savings Bonds.
The available bonds will be spread out among as many investors as possible in the following manner:
For more details, you can refer to the Singapore Savings Bond factsheet.