Purchase of Singapore Savings Bonds by Charities and Institutions of Public Character

Ms Foo Mee Har asked the Deputy Prime Minister and Minister for Finance (a) whether charities and Institutions of a Public Character are eligible to buy Singapore Savings Bonds; and (b) if so, whether a higher investment cap can be applied to these organisations,  compared to individual investors.

Since the Government announced its plans to introduce the Singapore Savings Bond (SSB), there have been suggestions for charities,

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Institutions of a Public Character (IPCs) and other not-for-profit organisations, like trade unions, to also be eligible to purchase SSBs.

The SSB is intended to provide retail investors with a safe and flexible option to save for the long term. Therefore, the SSB has features, such as the small minimum investment amount and non-transferability, which were designed with individual savers in mind.

Organisations like charities, IPCs or unions that are interested to invest in Government securities are currently able to invest in conventional Singapore Government Securities. The returns on SSBs are based on those of conventional Singapore Government Securities, and both securities are guaranteed by the Government.

There is no limit on the amount of conventional Singapore Government Securities that can be held by institutional investors. Organisations can also consider other safe fixed-income products, such as bonds issued by Statutory Boards.

The main difference is that the SSB can be redeemed with the Government before maturity for the full principal amount and no penalty. The added protection against capital loss is intended to encourage individuals to save, notwithstanding concerns about immediate liquidity needs, which organisations are in a better position to plan for.