The effective interest rate for April 2022 Singapore Savings Bonds (SBAPR22 GX22040H) is 1.91% if you held it for 10 years. The minimum amount you can purchase is S$500. If you decide to hold and sell the current issue (SBAPR22 GX22040H) after 1 year, the effective interest rate is 0.71%.
As you can see from the chart above, the interest rate is at 12 months high. Despite the low interest rate, Singapore Savings Bonds complement your other savings and investments as a safe way to save for the long term. It is basically near to zero risks.
The recent sudden Russia and Ukraine war has caused volatility in the global stock markets. During war times, the prices of gold and bonds will usually go up because people believe these are safer assets.
Thus, if you want almost zero risk, Singapore Savings Bonds is a good almost zero risk investment.
Singapore Savings Bonds Alternatives
For low risk and higher returns, you can consider Dash EasyEarn or Dash PET.
When Dash EasyEarn was launched, it offered 2.00% p.a. for the first year. Recently, it has announced the reduction of its return from 2.00% p.a. to 1.20% p.a.. This will be effective from 30th July 2021 onwards.
Recently Dash PET had reduced its rate of return from 1.0% p.a. from second year onwards to 0.7% p.a..
Higher Returns But Higher Risk
If you are a risk taker, you can try purchasing Crypto and depositing with Hodlnaut to earn higher interest.
Crypto is definitely not for the faint hearted. If you are looking for safe haven, stick to Singapore Savings Bonds.
Is Singapore Savings Bonds still Useful?
Most of the financial products out there require you to invest using cold hard cash. This is where the Singapore Savings Bonds outshine them. You can purchase the Singapore Savings Bonds using your Supplementary Retirement Scheme (SRS) funds.
The interest rate for Supplementary Retirement Scheme (SRS) fund is only 0.05% per annum. You can top up your SRS account to offset your annual taxes and then use the funds from your SRS account to purchase Singapore Savings Bonds to earn a higher interest rate.
Tracking Singapore Savings Bonds via Stocks Café
My favourite 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 favourite 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)