You will be able to apply for an SSB, pick the right funding source and know which limits to check before you do.
Farah has decided an SSB might suit part of her savings. On the last weekend of the month she logs into her bank to apply, and the SSB option is gone. The window closed a few days earlier. Next month's issue has a different schedule. Nothing is lost, but the lesson sticks: an SSB application has a timetable and a set of rules, and you need to know them before you are standing at the ATM.
Each SSB issue has an application window in the month before the bond is issued. You apply during that window, MAS works out who gets what after it closes, and the bonds are issued at the start of the following month. Interest starts from the issue date, not from the day you applied.
The exact opening and closing times for each issue are on the MAS SSB page, along with the issue date. Banks often close their own channels slightly earlier than the official cut-off, so check your bank's page too. If you plan to apply, put the closing date in your calendar when the issue is announced rather than leaving it for the final weekend, as Farah did.
You apply through the internet banking or ATMs of the participating banks, which MAS lists on its website. When you apply with cash, the bonds are held in your CDP account, so you need an individual CDP account linked to a bank account for payments before you start. If you do not have one, opening it takes time, so sort it out well ahead of the window.
The money comes from one of two places. Cash is the simplest: the amount is taken from your bank account when you apply. SRS funds are the other route. If you have a Supplementary Retirement Scheme account, you can apply through your SRS operator, and the bonds and their interest stay inside SRS.
What you cannot use is your CPF savings. SSBs are not open to CPF money at all. That is a common point of confusion, because T-bills and SGS bonds can be bought with CPF Ordinary Account savings under the CPF Investment Scheme. Lesson 4.4, Paying with cash, SRS or CPF, and what each really costs, covers that route. For SSBs, it is cash or SRS only.
Each application and each redemption may carry a small transaction fee. Check the current fee on the MAS page, because on a small holding it eats into the first interest payment.
MAS sets two limits on how much SSB one person can hold. There is a limit on how much you can apply for in a single issue, and a limit on your total SSB holdings across all issues. Both figures have changed over the years, so look up the current ones on the MAS website on the day you apply and write down the date you checked. There is also a minimum amount and a set multiple you must apply in, listed on the same page.
The total limit matters more than people expect. If you already hold several issues, a new application that would push you over the total will not be filled in full. Add up what you already hold before you apply.
Each issue has a set size. Most months there are enough bonds for everyone, but when rates are attractive, applications can exceed the amount on offer. Then MAS allots the bonds in a way that spreads them across as many applicants as possible, which means smaller applications are filled first and larger ones may get only part of what they asked for.
Here is a simplified, made-up illustration of how that works. Suppose only S$6,000 of bonds are left for three applicants. Ayesha applies for S$1,000, Ben for S$5,000 and Chen for S$50,000. The bonds are handed out in equal slices of S$500, one slice per applicant per round, skipping anyone whose application is already full. After two rounds Ayesha has her S$1,000 and drops out. Three more rounds give Ben and Chen S$500 each per round, and the bonds run out. Ayesha gets all of her S$1,000, Ben and Chen get S$2,500 each, and the rest of their money is returned.
The real process follows the method MAS describes on its website and works with far larger numbers, but the shape is the same. If you apply for a big sum in a popular month, expect that you might receive only part of it, and have a plan for the rest of the cash.
Farah's second attempt went smoothly. She checked three things on the MAS page first: when the window closed, how much she could apply for in one issue, and how much she could hold in total. Do the same now, and note the date you looked, because those figures are the kind that change without much notice.
Check the current application window, per-issue limit and total holding limit on the MAS SSB page and record them with the date you checked.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).