Apply for an SSB, choose the right way to pay for it, and check the limits before you apply.
You can only apply for a Singapore Savings Bond (SSB) during its application window, which falls in the month before the bond is issued, and you can only pay with cash or SRS funds. Before you apply, you also need to know how much you may apply for in one go and how much you may hold in total.
Farah decided an SSB might suit part of her savings. On the last weekend of the month she logged into her bank to apply and found the SSB option had gone, because the window had closed a few days earlier. She lost nothing, since next month's issue has its own schedule. What she learned is that SSB applications run to a timetable, with rules you need to know ahead of time. Her mistake was leaving it to the final weekend when she could have noted the closing date as soon as the issue was announced.
Once a window closes, MAS (the Monetary Authority of Singapore) decides how many bonds each applicant gets. The bonds are then issued at the start of the following month, and that date is the issue date. Interest starts from the issue date, so applying early in the window does not make interest start any sooner.
Each month's issue has its own schedule. The MAS SSB page lists the exact opening and closing times of each window and the issue date. Banks often close their own application channels slightly before the official MAS cut-off, so check your bank's page as well. When an issue is announced, put its closing date in your calendar and apply well before the final weekend.
You apply through the internet banking or ATMs of participating banks, and MAS lists those banks on its website. Bonds bought with cash are held in your CDP account. You need an individual CDP account linked to a bank account for payments, and opening one takes time, so do it well before the window opens.
Cash is the simpler payment source. The amount is deducted from your bank account at the time you apply. If you have a Supplementary Retirement Scheme (SRS) account, you can apply through your SRS operator instead. Bonds bought with SRS funds, and the interest they pay, stay inside SRS.
CPF savings cannot be used to buy SSBs in any form. People get confused about this because T-bills and SGS bonds can be bought with CPF Ordinary Account savings under the CPF Investment Scheme, covered in Lesson 4.4, "Paying with cash, SRS or CPF, and what each really costs". That route is not available for SSBs.
Each application and each redemption may carry a small transaction fee, and the current fee is on the MAS page. On a small holding, the fee takes a noticeable share of the first interest payment.
Every issue has a fixed size. In most months there are enough bonds for every applicant. When rates are attractive, applications can exceed the amount on offer, and MAS then decides the allotment so the bonds reach as many applicants as possible. Smaller applications are filled first, larger ones may be only partly filled, and any money not allotted goes back to the applicant.
A simplified illustration shows how this works. Suppose S$6,000 of bonds is left, to be shared by three applicants. Ayesha applies for S$1,000, Ben for S$5,000 and Chen for S$50,000. The bonds are split into equal slices of S$500. In each round, every applicant whose application is not yet filled gets one slice, and anyone whose application is already full is skipped. The rounds continue until the bonds run out, and any amount not allotted is returned.
In rounds 1 and 2, each of the three gets S$500 per round. That is S$1,500 per round, or S$3,000 over the two rounds. After round 2, Ayesha, Ben and Chen each have S$1,000. Ayesha's application is now full, so she drops out.
In rounds 3, 4 and 5, Ben and Chen get S$500 each per round, which is S$1,000 per round and S$3,000 over the three rounds. The total handed out is S$3,000 + S$3,000 = S$6,000, and at that point, after five rounds in all, the bonds run out.
Ayesha ends up with S$1,000, all of her application. Ben gets S$2,500, and S$5,000 - S$2,500 = S$2,500 is returned to him. Chen also gets S$2,500, and S$50,000 - S$2,500 = S$47,500 is returned to him.
The real allotment follows the method MAS publishes on its website. It involves far larger numbers but works the same way. If you apply for a large amount in a popular month, expect to receive only part of it, and decide beforehand where the returned cash will go.
MAS sets two limits on how much SSB one person can hold. The per-issue limit is the most you can apply for in a single issue. The total holdings limit is the most you can hold across all SSB issues combined. Both limits have changed over the years, so look up the current figures on the MAS website on the day you apply. The same page lists the other figures you need. Before each application, write down:
the per-issue limit the total holdings limit the minimum application amount the fixed multiple that applications must be made in the transaction fee the date you checked
The total holdings limit matters more than people expect. If you already hold several issues and a new application would take you over the total, the application will not be filled in full. Add up the SSBs you already hold before you apply, and remember these figures can change with little notice.
Farah's second attempt went smoothly. Before applying, she checked three things on the MAS page: when the window closes, how much she could apply for in one issue, and how much she could hold in total.
Now make the same three checks Farah made on the MAS SSB page: when the window closes, how much you can apply for in one issue, and how much you can hold in total. Note the date you looked, because those figures are the kind that change without much notice.
Go to the MAS SSB page and note the current application window, the per-issue limit and the total holding limit, along with the date you checked.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).