Interest in Singapore Savings Bond

8 Mr Saktiandi Supaat asked the Prime Minister (a) what has been the take-up rate for the Singapore Savings Bond since its launch in September 2015; (b) whether the Ministry is satisfied with the interest shown; and (c) what is the Ministry doing to reach out to the man in the street to explain the benefits of the bond.

The Minister for Education (Higher Education and Skills) and Second Minister for Defence (Mr Ong Ye Kung) (for the Prime Minister): The Savings Bonds programme was to expand the range of low-cost investment options for individual investors. The safety and flexibility of Savings Bonds mean that they are well suited to those putting aside "rainy day" funds. Savings bonds can also form part of an investor's portfolio, complementing other higher risk, higher return investments.

Since the launch of the programme in September 2015, around 35,000 individuals, from all age groups, have invested S$970 million into 14 Savings Bonds issues. MAS is encouraged by the take-up rate.

That notwithstanding, we think more can be done to raise public awareness and understanding of Savings Bonds. One of the common misperceptions is that the investments in Savings Bonds are locked up for 10 years. Although Savings Bonds mature in 10 years, an investor can withdraw some or all of the money invested, with interest, in any given month without penalty. This feature compares favourably against fixed deposits.

I would reiterate that the fundamental driver of Savings Bonds is global bond yields. Over the past several months, Savings Bond interest rates have declined due to lower global bond yields. When global interest rates normalise, we should likewise expect them to influence SGS and Savings Bond interest rates.

Efforts are ongoing to generate public awareness and a better understanding of the safety and flexibility that Savings Bonds offer. MAS has been reaching out to the public through publicity campaigns and community outreach activities. In particular, MAS has been working with partners, such as MoneySENSE, the Institute of Financial Literacy and grassroots organisations, to educate the public about Savings Bonds. Through these outreach efforts, we expect awareness and interest in Savings Bonds to grow over time.

Mdm Speaker: Mr Saktiandi, keep it short, please.

Mr Saktiandi Supaat (Bishan-Toa Payoh): I thank the Minister. I just want to appreciate the benefits of Savings Bonds. The reason why I asked was because a young resident of mine highlighted that the eligibility for Savings Bonds is 18 years and above. This highlights the importance of starting early so that they can have a longer runway. The Minister mentioned just now about retirement savings and for rainy day savings. I was wondering what are the outreach efforts by MAS to the young, as it helps them to achieve a longer runway, going forward.

Mr Ong Ye Kung: I thank the Member for his interest in wanting the young to start early. Saving is, indeed, a good virtue and I hope you can play your part, too, and explain to the young. We intend to launch another publicity effort, but this has to be timed properly, such as waiting until the US Presidential Election is over! Time it properly sometime next year, and I think we have to reach out in a more concerted proactive way.

12.30 pm

Mdm Speaker: Order. End of Question Time.

[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 10 and 11 on the Order Paper are reproduced in the Appendix. Question Nos 8, 12 and 13 have been postponed to the next available Sitting of Parliament.]