Singapore issues first savings bond

Singapore will issue its first savings bond, with long-term interest rates up to 2.63 percent per year in October, the Monetary Authority of Singapore (MAS) announced on Tuesday.

The 1.2 billion Singapore dollars worth of the Singapore savings bond will be available for application from Sept. 1 through 25, while the bond will be issued on Oct. 1, MAS said.

The interest rates of the bonds are calculated using the market- determined interest rates of Singapore Government Securities (SGS). As the yearly interest steps up over time, the average return also increases, the longer the savings bond is held. The average return per year will range from 0.96 percent for one year to 2.63 percent at the end of year ten.

A new savings bond will be issued every month for at least the next five years, MAS said, adding that up to 4 billion Singapore dollars of savings bonds could be issued this year depending on demand.