SINGAPORE: Returns on the Singapore Savings Bonds hit record highs for the second straight month, with the latest December issue offering a 10-year average return rate of 3.47 per cent.
The first-year interest rate of 3.26 per cent is also the highest ever, beating the record set in the previous issue, according to information from the Monetary Authority of Singapore released on Tuesday (Nov 1) afternoon.
The Singapore Savings Bonds are a type of Singapore Government Securities (SGS), meaning they are issued and fully backed by the Singapore Government.
They were first rolled out in 2015 to provide retail investors with a flexible and risk-free investment option. About 120,000 individuals hold more than S$5.7 billion worth of savings bonds as at the start of 2022.
New tranches of the Singapore Savings Bonds are released at the start of each month, with fixed interest rates that step up for each year they are held and locked in for 10 years.
The interest rates of each issuance are based on the average SGS yields in the month before applications open. These yields have been on an uptrend like all other major economies’ bond yields, as global central banks raise interest rates.
The previous record highs for returns were set last month when the 10-year average return hit 3.21 per cent and the first-year interest rate touched 3.08 per cent. That issue received applications worth S$2.2 billion, outstripping the S$900 million worth of bonds issued.