CNA Explains: Why are Singapore Savings Bonds in hot demand and should you invest in them?

Article by CNA
15 August 2022

This article explores why Singapore Savings Bonds are gaining traction as of late as an investment product, with the latest tranche in August receiving applications worth $2.4 billion, the highest since the bonds were launched in 2015. The rush comes as the returns have been on the rise, hitting a record high of 3 per cent in the August issue. The article goes on to explain what the Singapore Savings Bonds are and how investments into the bonds can be made.

The article has included CEO/CIO Chuin Ting’s comments on why these yields have been on an uptrend as global central banks raise interest rates and mull other ways of normalising policy to combat inflation. It also mentions Chuin Ting’s comments – where the interest rates will be headed depends on the trajectory of inflation and the central bank. The article also weighs the pros and cons of investing in Singapore Savings Bonds, carrying comments from Chuin Ting about how the non-refundable $2 administrative fee for applications and redemptions before the 10-year maturity may eat into the returns of those investing very small amounts.

The article then talks about the correct approach to investing in bonds, highlighting Chuin Ting’s comments on whether age could be a consideration when it comes to asset allocations and that the ability to take risks is not “age per se” but one’s time horizon. 

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