The effective interest rate for Singapore Savings Bond (SSB) November 2024 (SBNOV24 GX24110N) has fallen to 2.56% if you held it for 10 years. This is anticipated as last month, US Federal Reserve announced a 50 bps rate cut. Based on the graph above, this is the lowest interest rate being offered over the last 12 months. You can read more below to find out the relation between US Federal Reserve rate cuts and Singapore Savings Bond.
What are Singapore Savings Bonds?
Singapore Savings Bonds are a type of government bond issued by the Monetary Authority of Singapore that offers individuals a safe and flexible way to save money. These bonds have a low minimum investment amount, starting at just $500, and offer a higher interest rate than traditional savings accounts.
Investors can purchase Singapore Savings Bonds directly from the government and hold them for up to 10 years, earning regular interest payments along the way. These bonds are considered a low-risk investment option, making them popular among risk-averse investors looking to grow their savings over time.
How will the US Federal Reserve Interest Rates Cut Affect Singapore Savings Bonds Interest Rates?
The US Federal Reserve interest rates can have an impact on Singapore Savings Bonds. When the Federal Reserve increases interest rates, it can lead to higher borrowing costs globally. This may prompt the Singapore government to adjust its own interest rates on savings bonds to remain competitive and attract investors.
Additionally, a rise in US interest rates could lead to a stronger US dollar, making Singapore Savings Bonds less attractive to investors seeking higher returns. Overall, fluctuations in US Federal Reserve interest rates can indirectly influence the yields and demand for Singapore Savings Bonds.
Why Buy Singapore Savings Bonds Over Other Type of Investments?
One benefit of Singapore Savings Bonds over other types of investments is their low-risk nature. Singapore Savings Bonds are backed by the Singapore government, making them a very safe investment option.
Additionally, they offer a higher interest rate compared to traditional savings accounts, making them a more attractive option for those looking for a low-risk investment with better returns.
Another advantage is that Singapore Savings Bonds are flexible, allowing investors to redeem them at any time without any penalties. This makes them a convenient choice for those who may need access to their funds in the short term.
How To Track Singapore Savings Bonds?
To track your Singapore Savings Bonds, you can visit the official website of the Monetary Authority of Singapore (MAS) where they provide regular updates on the issuance and performance of the bonds.
I use Stocks Café to track my Singapore Savings Bonds purchases. If you like to know more about Stocks Cafe, please read up my previous review of Stocks Cafe.
Singapore Savings Bonds Interest Calculator
Monetary Authority of Singapore (MAS) had come up with a Savings Bonds interest calculator which you can use to calculate how much interest you would earn if you held SSB Nov 2024 for 10 years.
Let us use an investment of S$10,000 as an example. If you purchase SSB Nov 2024 and held it for 10 years, you will receive a total earning of S$2,577. You will receive an estimate of S$225 per year until maturity in November 2034 depending on the interest rate for that year.
Below is the interest per year for Singapore Savings Bond November 2024.
| Year from issue date | Interest % | Average return per year %* |
| 1 | 2.25 | 2.25 |
| 2 | 2.25 | 2.25 |
| 3 | 2.25 | 2.25 |
| 4 | 2.58 | 2.33 |
| 5 | 2.67 | 2.39 |
| 6 | 2.67 | 2.44 |
| 7 | 2.67 | 2.47 |
| 8 | 2.74 | 2.50 |
| 9 | 2.82 | 2.53 |
| 10 | 2.87 | 2.56 |
*At the end of each year, on a compounded basis.