Skip to main content

Singapore Savings Bond versus Savings Account versus Fixed Deposits

The latest Singapore Savings Bond (“SBSep17“) is offering 2.12% effective interest rate over a ten years period. Many people have been lamenting about the low interest rates and I also think the Singapore Savings Bond interest rate is not attractive. I decided to do some research by comparing it with similar low risk products out such as a popular high yield Savings account and Fixed Deposit account. I am excluding REITs and Stocks in the comparison as the intention is to park the money somewhere as a form of war chest or savings.

I picked CIMB StarSaver Account, CIMB 12 month fixed deposit and MayBank 12 month fixed deposit. Read More

May 2017 Singapore Savings Bonds is 2.32%

If you have followed my blog post on Singapore Savings Bonds, you will know that I have bought Singapore Savings Bonds in October 2015 where the effective interest rate is 2.63%. Time flies and I have received my third payout in the month of April 2017.

The effective interest rate for May 2017 (GX17050F) Singapore Savings Bonds is 2.32%. Seems there is slight recovery in interest rates. Although the interest rate is not attractive, the money can serve as a contingency fund. My ideal contingency fund is around six times your current salary. In case we get retrenched, the period of 6 months is sufficient for us to find a new job. Read More

April 2017 Singapore Savings Bonds is 2.27%

The effective interest rate for April 2017 Singapore Savings Bonds is 2.27%. Seems that interest rate is declining but it still beats the traditional fixed deposits. Banks are also slashing its interest rates. A good example will be OCBC 360. (Read more here: OCBC 360 Account Makes Earning Additional Interest More and So Complicated)

While browsing the Singapore Savings Bond website, I came across the FAQ they have put up on their website.

Here are some things I do not know of and may be interesting to you as well

Does the Government need the money? What will the Government use the money for?

The Government is not issuing Savings Bonds to finance its expenditure. The money raised from issuing Savings Bonds cannot be spent and will be invested.

Are Savings Bonds going to be a permanent feature?

The Government is committed to maintaining the Savings Bond programme for at least 5 years.

Is there any scenario under which I am allowed to transfer my Saving Bonds?

Savings Bonds cannot be transferred except in specific situations such as the death of the bondholder. In such cases, the bonds can be transferred to the rightful beneficiaries according to the deceased person’s will or under the intestacy law.

The above FAQ is extracted from Singapore Savings Bond website. You can read more here: http://www.sgs.gov.sg/savingsbonds/Resources/FAQs.aspx

Current Thoughts

While I am hunting for some good dividend stocks and reits to invest, my war chest is sitting in my bank earning a petite interest rate of less than 0.8%. I have some thoughts. Should I put my money into Singapore Savings Bond for the time being?

Subscribe to My Sweet Retirement via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.