Savings bond details released!

Here's more details on the Singapore Savings Bond: http://www.straitstimes.com/news/business/banking/story/singapore-savings-bonds-8-things-you-should-know-20150512

My take:
(1) Returns are 2 - 3%: Currently there are certain bank accounts which give around the same returns (eg: OCBC 360, UOB One account and DBS accumulator), and this is fairly liquid (although the SSB are not significantly illiquid)

(2) Cap is 100k: The drawback of those bank accounts are that the cap for interest are limited to the first 50k. If you have excess cash above 50k that is used as emergency cash and not for investment purposes, this could be a good place to dump to. [honestly though, i don't know who has 150k spare cash lying around - but there are many cash rich people that i don't know of]

(3) Capital guaranteed: Well almost. But backed by the government, that is as good as it can get. Relatively safe haven for your money.

Conclusion: Will i bite? I will potentially, if i have a lot of cash sitting around.

Singapore Savings Bond

MAS introduced a new product - Singapore Savings Bond.

Much have been written about it by various bloggers. The pros are obvious:

1. No lock in period

2. Higher interest rates than fixed deposit - similar to government bonds/treasury bills

3. Backed by the government (99.9% safe)

This is like having your pie and eating it!

I personally think this is a good product, who can argue against the previous points if you are looking for a risk-free return with a higher rate of return? In any case, i think the government will probably restrict the amount an individual can invest this in... otherwise, i think a lot of cash rich Singaporeans will just dump all their money in!

I do wonder a little of the motivations though: This will soak up the liquidity in the market..... banks will be 'forced' to offer a higher interest rates to attract depositors to place money with them. This would then mean that they will need to charge a higher rate on their loans (housing etc).

This is like a tightening of the money supply and would have a deflationary impact on the economy, and act as another damper on the housing market.

Am i right? Or am i worrying too much?