SBAUG20 GX20080E is 0.93%

Singapore Savings Bonds

The effective interest rate for August 2020 Singapore Savings Bonds (SBAUG20 GX20080E) is 0.93% if you held it for 10 years. As you can see from the chart above, the interest rate has been on the decline but recovered slightly this month. The COVID-19 pandemic that started in March 2020 had caused the interest rates to fall dramatically across fixed deposits and savings accounts.

The minimum amount you can purchase is S$500. If you decide to hold and sell the current issue (SBAUG20 GX20080E) after 1 year, the effective interest rate is 0.27%.

Unhappy with the interest rates offered by Singapore Savings Bonds? There are alternative financial instruments out there that offer higher interest rates. They are short term endowment plans such as NTUC Income Gro Capital Ease, Tiq 3 Year Endowment Plan and China Taiping i-Save Plan which offers an interest rate of 1.85%, 2.10% p.a. and 2.13% p.a. respectively.

The latest attractive financial instrument that I have signed up for is Singlife Account that offers you an attractive interest rate of 2.5% p.a. Singlife Account is an insurance savings plan. There is no lock in period, no monthly fees and you can withdraw your money anytime.

Tracking Singapore Savings Bonds via Stocks Café

My favorite website, Stocks Café has allows adding of Singapore Savings Bonds into your portfolio. If you didn’t know, I signed up as a Friend of Stocks Café as my most favorite feature of Stocks Café is the automated tracking of dividends payout.

This is the third year that I continue to use Stocks Café to track my dividends.

Tracking Singapore Savings Bonds via My Savings Bonds Portal

MAS has launched My Savings Bonds Portal where you can track your Singapore Savings Bonds purchases separately from your stock purchases. I have done up a simple guide here. (Read more: Guide to My Savings Bonds Portal)

Screen For Dividend Stocks In June 2020

The Best Fixed Deposits of May 2020

Do you know how to screen for dividend stocks in the stock market? One of the ways I use to find dividend stocks is to use a tool called a stock screener. Most stock screeners are available for free. A few websites that I know of that offers free stock screeners are FSMOne, Yahoo and Singapore Exchange.

My favorite stock screener is from Stocks Café. With a paid subscription, I can save my preferred stock screening criteria and not having to enter them every time. Stocks Café is also where I managed my stock portfolio.

Every end of the month, I will run the Stocks Café stock screener which gives me a list of stocks that fulfill my dividend criteria. I fall into the medium risk type of investor and thus I never looked at stocks with dividend yield more than 10%. Below are the criteria that I used to identify dividend stocks.

  • Current Yield (%) >= 5 and <= 10
  • Price / Earnings <=20
  • Price / Book <= 3
  • Market Capitalization >= 1B

Dividend Yield

As a dividend investor, one criteria that I will definitely like to have is the dividend yield. I usually screen for stocks that gives a dividend yield of between 5% to 10%. We need to be careful with stocks that provides extremely high dividend yield and do our due diligence to further investigate the company that it is not borrowing money to pay out dividends.

P/E Ratio (Price to Earnings Ratio)

We also refer P/E ratio as Price to Earnings ratio. It is calculated by dividing the current market price of the stock by its earning per share (EPS). It also means how much investors are willing to pay per share of the company. My preferred settings are stocks less than 20x earnings.

P/B Ratio (Price to Book Ratio)

We refer P/B ratio as Price to Book ratio. P/B ratio is calculated by dividing the price per share by book value per share. A value lower than 1 is considered as a good P/B ratio and could mean that the stock is undervalued. My preferred P/B Ratio is below 3.

Market Capitalization USD (in millions)

If you have followed my previous stock analysis of companies, one of the criteria I often looked at is the market capitalization of the company. Market capitalization refers to the total value of all a company’s shares of stock. I currently look at companies with market capitalization above one billion.

Top Dividend Yielding Stocks

As retail malls and shops start to open up after circuit breaker, the stock market has started its recovery. This can be seen from the Straits Times Index stock chart below.

Straits Times Index 28 Jun 2020

Below are the top dividend yielding stocks as of 28th June 2020. I believe you will see some REITs that you have been eyeing for before the stock market had crashed. Even though the stock prices have started the recovery, the current yield is still attractive.

NameCurrent Yield %P/EP/BMarket Cap
CromwellReit EUR9.7149.050.8141.1B
CromwellReit SGD9.519.320.8481.7B
CDL Hospitality Trust8.75711.080.6741.3B
OUE Commercial Reit8.3814.960.6472.1B
CapitaR China Trust7.7348.260.8261.6B
Starhill Global Reit6.52419.730.5941.1B
Frasers Logistics & Industrial Trust6.09311.481.2954B
Hong Leong Finance6.04810.750.581.1B
Jardine Cycle & Carriage66.630.8648B
OCBC Bank5.8636.190.87139.8B
Yanlord Land5.8623.410.4112.2B
TCIL HK$5.8217.860.3363.8B
Olam Intl5.6748.510.8344.5B
Bukit Sembawang5.64113.270.7631B
Suntec Reit5.58110.280.6754.1B
Genting Singapore5.26313.311.1379.2B
CapitaCom Trust5.13315.180.9396.7B
SPH REIT5.11914.070.9342.4B

Last, I just want to mention again that the above list is for reference only and we should do our homework before buying into the stock simply for the dividend yield.

NTUC Income Gro Capital Ease

NTUC Income Gro Capital Ease

NTUC Income Gro Capital Ease is a single premium savings plan that gives you a lump sum payout with guaranteed return of 1.85% per annum over 2 years. You will receive the lump sum payout at the end of the policy term.

Similar to NTUC Capital Plus offered in the previous tranche, the minimum amount for Gro Capital Ease is only S$5,000 per policy which you can pay using cash or using your Supplementary Retirement Scheme (SRS) fund. The maximum amount allowed per policy is S$200,000.

As this is in fact an endowment plan, it comes with insurance benefits. In the event of death or total and permanent disability (before age 70), you will receive the net single premium (Within 1 year from the cover start date) or 105% of the net single premium (After 1 year from the cover start date)

How Does This Plan Fare Against Singapore Savings Bonds?

NTUC Income Gro Capital Ease offers you an interest rate of 1.85% per annum over 2 years. Below is the interest rate for July 2020 issue of Singapore Savings Bonds. The interest rate is 0.30% for year 1 and 2.

Needless to say, NTUC Income Gro Capital Ease is the clear winner against the Singapore Savings Bonds.

SBJUL20 GX20070W Interest Rates

How Does The Endowment Plan Fare Against Fixed Deposits?

The best two fixed deposits which I have found this month is from DBS and Maybank.

For a 12 months placement on amounts from S$1,000 to S$49,999 with DBS Bank, you get an interest rate of 1.40% per annum.DBS Fixed Deposit Rates May 2020

The Maybank iSAVvy Time Deposit offers an interest rate of 1.40% per annum for a minimum placement of S$25,000 over 2 years.

NTUC Income Gro Capita Ease is still the clear winner here if we compare the interest rate with the interest rates offered by current fixed deposits promotions.

My Opinion

This is the only endowment plan that I am aware of that allows you to buy using your Supplementary Retirement Scheme funds. With falling interest rates by Singapore Savings Bonds and fixed deposits, this is the current most attractive plan around to grow your money with low risks involved.

NTUC Income Gro Capital Ease is available on a limited tranche and first-come-first-serve basis, so for those that are interested, please visit NTUC Incomes website to sign up.