Categorized | CDP, Featured, Money Market

Singapore Saving Bonds VS Fixed Deposit

1. Fixed deposits is guaranteed by the bank where your fixed deposit is put in. All bank deposits are further insured under Singapore deposit insurance scheme up to 50,000.

Singapore saving bonds are issued and guaranteed by the government of the Republic of Singapore. A government bond has traditionally been viewed as risk free until the Greece debt crisis.

2. Tenor
According to MAS, the new Singapore savings bonds would have a term of 10 years but investors would be able to redeem the bond without penalty at any given months. This is because interest are paid out to the investor every 6 months. In contrast, for a 1 year fixed deposit, if you try to redeem it in 6 months, the penalty would likely wipe out all interests payable. Thus the Singapore saving bonds gives flexibility in tenor to investors while fixed deposit are “fixed”.

3. Higher interest rates
The Singapore saving bonds rates are pegged to the Singapore Government Securities (SGS) rates. SGS yield about 0.95 percent for one-year and 2.6 percent for 10 years. Bank deposits fetch around 0.25 percent for a year and just double that for 24 months. This is a huge improvement from the fixed deposit rates. This also meant that it is now almost on par with the endowment plans provided by the insurance companies.

4. Minimum and maximum sum
The minimum amount to invest in the Singapore savings bond is $500 up to a maximum of $50,000 per issue and max of $100,000 while the minimum fixed deposit is $5000 for most banks and $1000 for DBS. Logically the Singapore savings bond is made for low to middle income individuals.

5. Criteria to invest
While the Singapore savings bond has a lot of advantages over the traditional fixed deposit, one disadvantage it has is that it requires all investors to hold an individual Central depository account( CDP). The CDP account is used for holding shares for those who trade the stock market.
You would also need to enable the direct crediting service(DCS) for proceeds into your bank account. For application, you would also need an individual account from either DBS/POSB, UOB or OCBC

The Singapore Savings bonds is only available for individuals, not even joint account between couples. On the other hand, there is no restriction on fixed deposit unless you walked into the bank branch with a suitcase of $100,000 in cash and you can’t prove where you withdraw it from.

If you are thinking of investing in Singapore savings bond, you might want to get your CDP account done early as there is likely to be a bit of last minute rush by some which will cause you delay. However the take up rate by the elderly population is unlikely to be high so the chance of the Saving Bonds having a significant impact on the amount of funds in the banks is unlikely.


3 Responses to “Singapore Saving Bonds VS Fixed Deposit”

  1. Katherine Watt says:

    Hi, Could you please advise how to transfer the deceased shares to the wife if he has not made any Will? Could you please email me at

    Many thanks and regards


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