Senior Minister of State for Finance Josephine Teo announced a new type of bond called the Singapore Savings Bonds to help Singaporeans get a better return on their money. There are not much details revealed but what is known is:

1. Principal guaranteed by the government
2. The ability to get his or her money back in given month with no penalty
3. Interest rate that is linked to long term SGS rates
4. Singapore Savings Bonds will pay coupons that ‘step up’ or increase over time, providing investors with higher return the longer they hold the bonds

Not really a lot of numbers for us to work with. Honestly this thing is like a dream, got liquidity, got higher than fixed deposit returns backed by the government. How is that possible? We know that the main characteristic of a bond is different maturity periods and interest rate sensitivity. This Savings Bonds look more ......