The effective interest rate for January 2022 Singapore Savings Bonds (SBJan22 GX22010S) is 1.78% 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 (SBJAN22 GX22010S) after 1 year, the effective interest rate is 0.45%.
As you can see from the chart above, the interest rate is recovering. 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.
Singapore Savings Bonds Alternatives
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.
Similarly, Dash PET had reduced its rate of return from 1.70% p.a. to 1.3% p.a. for the first S$10,000.
Both plans still beat Singapore Savings Bonds 1 year return of 0.45% p.a.
Higher Returns But Higher Risk
Cryto 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)