November 2019 Singapore Savings Bonds is 1.74%

The effective interest rate for November 2019 Singapore Savings Bonds (GX19110F) fell to a new low which is 1.74% if you held it for 10 years. The interest rate is the lowest and the worst for the past 12 months. The minimum amount you can purchase for Singapore Savings Bonds is S$500. If you decide to hold and sell it for 1 year, the effective interest rate is 1.62%.

If Singapore Savings Bonds does not suite your taste bud, you can consider fixed deposits.

DBS Multiplier Account + Singapore Savings Bonds

If you hold a DBS Multiplier Account, you can perhaps try the hack I previously wrote about to achieve a higher interest rate payout. (Read more: Earn More Interest With DBS Multiplier Account + Singapore Savings Bonds).

Tracking Singapore Savings Bonds via Stocks Café

My favorite website, Stocks Café has introduced a new feature to allow 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.

I have renewed my subscription with Stocks Café and this is the second 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)

October 2019 Singapore Savings Bonds is 1.75%

The effective interest rate for October 2019 Singapore Savings Bonds (GX19100N) fell to a new low which is 1.75% if you held it for 10 years. The interest rate is the lowest and the worst for the past 12 months. The minimum amount you can purchase for Singapore Savings Bonds is S$500. If you decide to hold and sell it for 1 year, the effective interest rate is 1.64%.

Currently, CIMB Fast Fixed Deposit offers a fixed deposit interest rate of 1.70% p.a. for 3 months period. CIMB Fast Fixed Deposit also offers an interest rate of 1.85% p.a. for a 12 months period. However, there is a minimum placement of S$10,000 required and only for online deposit.

DBS Multiplier Account + Singapore Savings Bonds

If you hold a DBS Multiplier Account, you can perhaps try the hack I previously wrote about to achieve a higher interest rate payout. (Read more: Earn More Interest With DBS Multiplier Account + Singapore Savings Bonds).

Tracking Singapore Savings Bonds via StocksCafe

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

I have renewed my subscription with StocksCafe and this is the second year that I continue to use StocksCafe 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)

NTUC Capital Plus Versus Singapore Savings Bonds Versus SPH REIT

You probably would have read about the latest Endowment Plan offered by NTUC Income. The latest tranche NTUC Capital Plus (CSN2) offers you 2.3% guaranteed yield per annum. The endowment is a 3 year single premium endowment plan which you can purchase via cash or using your Supplementary Retirement Scheme (SRS) fund. There is a minimum premium of S$20,000. When the policy matures 3 years later, you get a guaranteed maturity benefit. This means that if you place S$20,000, at the end of 3 years, the maturity value will be S$21,412 inclusive of your principal amount and thus a profit of 7.06%.

NTUC Capital Plus (CSN2) Versus Singapore Savings Bonds

How does this compare to latest issue of the Singapore Savings Bonds? Let say if you have purchased S$20,000 of the latest issue of Singapore Savings Bonds (September 2019 GX19090H), you will get a total return of S$990 if you redeem it in September 2022. NTUC Capital Plus (CSN2) wins!

NTUC Capital Plus (CSN2) Versus SPH REIT

How does NTUC Capital Plus (CSN2) fare against REITs? In my opinion, REITs are low risk investment instruments. For comparison, I will use SPH REIT which I felt that the share price has been relatively stable over the years. Based on a distribution of 5.54 cents in FY2018 and the current price of S$1.10 (as of 27 August 2019), this translates to a dividend yield of 5.04%.

If we have bought SPH REIT today, 3 years later, we should collect an estimated total dividends of 5.04% x S$20,000 x 3 years = S$3,024. SPH REIT wins! The risk here is that there is no guarantee you can get your principal amount of S$20,000 back 3 years later as this is subjected to the stock market conditions at that point in time.

Conclusion

NTUC Capital Plus (CSN2) Singapore Savings Bonds (GX19090H) SPH REIT
Total (S$) collected based on investment amount of S$20,000 for 3 years S$1,412 S$990 S$3,024

This is not a recommendation to buy or sell the above products but for illustration purposes only. If you can stomach the volatility of the stock market, then consider REITs for higher returns. Otherwise, NTUC Capital Plus may be a better choice if you have spare cash to lock down for 3 years. On the other hand, it does make sense to use your SRS to purchase NTUC Capital Plus (CSN2) for the higher yield since SRS can only be withdrawn after your retirement age. For those who foresee you need cash on hand in the near future, the Singapore Savings Bonds is almost risk free and safe haven.