Speaking at the celebrations at The Float @ the Marina Bay, Prime Minister Lee Hsien Loong said all NSmen will receive vouchers to enjoy a movie or meal with their family and friends.
In addition, Operationally Ready NSmen who are currently serving out their cycles, as well as those who have completed their cycles, will also receive a year's free membership to SAFRA or HomeTeam NS.
Mr Lee said the "hongbao" will cost the government S$100 million. But he said the gestures will never fully compensate for their personal sacrifices.
The vouchers, with value of between S$50 and S$100 each, can be used for groceries, dining, recreation and at petrol stations, among other things. These will be handed out next year.
Servicemen will receive a letter by post between January and April 2013 informing them of their eligibility for the benefits.
Prime Minister Lee said that the commitment of the Singapore Armed Forces (SAF) and the Home Team in protecting Singapore has won the country 45 years of peace and stability.
He said fortunately, Singapore has not had to fight a war but added this was not a matter of luck.
He said the SAF, by its very existence and capabilities, has contributed to the stable and peaceful security environment in the region, and helped Singapore maintain friendly relations with its neighbours.
He added the Home Team has protected the country against unconventional threats like extremist terrorism and put would-be perpetrators away before they could do the nation harm.
Mr Lee said looking ahead, he is cautiously optimistic that the region will remain peaceful.
"One key factor is relations between the US and China. We must expect problems, frictions and tensions to arise from time to time between the two countries," he said.
"But both Chinese and American leaders recognise how inter-dependent they have become, and I believe they will strive hard to manage relations and avoid jeopardising their major shared interests."
Mr Lee went on to say: "In Asia, countries are trading, investing, and interacting more and more with one another. But there are also tensions in the region.
"Some ASEAN members have exchanged fire over territorial disputes. Tensions are brewing in the South China Sea and the East China Sea, also because of territorial disputes.
"North Korea remains a potential security flashpoint. In addition, we must always be prepared for emerging and unconventional threats, especially extremist terrorism, which remains a real danger.
"We therefore cannot take our present peace and stability for granted. We must continue to build and maintain a committed, competent and vigilant SAF and Home Team.
"We must upgrade our capabilities steadily year by year, in a sustainable and affordable way. We must help younger generations of Singaporeans who have grown up in a more stable and affluent environment understand these strategic realities, and prepare them for their part in defending Singapore.
"We must also strengthen Total Defence. Every Singaporean must be committed to the defence of Singapore, whether in the military, civil, economic, social or psychological domains."
Prime Minister Lee added that National Service is ultimately about safeguarding Singapore's homes, their loved ones and the country's freedom to determine its own way of life.
And it is a personal duty which generations of NSmen have fulfilled and which every new generation must take up.
So, as Singapore celebrates the first 45 years of National Service, Mr Lee urged Singaporeans to reaffirm their commitment to National Service and a strong SAF and Home Team.
The Defence and Home Affairs ministries say the benefits announced on Monday add to the various measures over the years to recognise servicemen for their vital contributions.
Operationally-ready NSman Captain Indrashah Muhammad Isa described the benefits as a "bonus", adding that "I'm grateful that we have this as part of them recognizing our contributions."
Full-time NSman, Corporal Wong Zeng An, said: "National Service itself, we shouldn't just go running on the logic that there must be carrots or incentives given to us all the time. But rather, we need to see beyond that and understand that National Service is present because of the importance of contributing to the defence and the security of the nation."
To mark 45 years of National Service, a book containing stories and pictures of servicemen over the generations was also launched.
Prime Minister Lee said: "Every Singaporean son is precious. It is our duty to provide our servicemen with all the equipment, training and support they need to fulfil their mission. But newer weapons, better welfare or comfier amenities are only part of the solution. What is most important is our Singapore spirit."
Awards were also given out to 15 people who attained high standards in training and contributed positively to their units as military servicemen.
