The capital markets are licensed to provide a wide range of activities such as trading in securities, futures contracts, advising on trading in securities, real estate investment trust management and many other activities. The sole objective of capital markets is to act as financial intermediaries for those who are selling and buying equity and debt instruments. Bonds are a sure way for investors because they receive a fixed income from them. The capital market in Singapore hosts around eight hundred companies, and around 40 % are foreign companies. The bonds have a high coupon rate as well as a maturity period which is mostly after ten years.
Singapore savings bonds
In fact, this is a unique type of government security which is given by the government to its individuals who are expected to save with the state, and the amount keeps on earning some interest over a period.
Advantages of Singapore savings bond
This means that the bonds are very flexible. Hence, an investor can have free entry and exit, and when one wants to opt out of the investment, no penalties will be incurred. This cannot be compared to other stock markets where you have to give few months notice before you exit the investment.
The savings bonds are safe such that the investor does not have any loses. This is because they are controlling by the government which is unlike many bonds where you are uncertain in matters regarding profits. The fact that you also get your capital and interest back also makes the bonds safe to invest.
The savings bond can invest up to ten years and the longer you invest the more interest you earn.
Requires little amount to start
The savings bond has made it very possible for any willing individual to start saving with them as little as $500. This amount is very affordable to many citizens, and therefore, this encourages a lot of investments by all citizens
Save for retirement
The bonds can also be a pension scheme for many retirees. This is because after the saving period then the government gives an investor back their funds. This can be a very significant milestone for retirees because of a certain amount when they retire. Most individuals end up misusing their funds when employed. This is because of lack of proper mechanisms to invest their money. Therefore savings bonds act as a great pension scheme.
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