Tag: Singapore Savings Bonds

I was caught by surprise when April 2018 Singapore Savings Bonds was over subscribed. One thing I concluded that it is not the Singapore Savings Bonds scheme that is not attractive, it was the low interest rates that were not attractive!

The effective interest rate for May 2018 Singapore Savings Bonds gives you an effective interest of 2.39% if you hold it for 10 years. That will be a total of S$2,416 of interests collected if you purchase S$10,000 of Singapore Savings Bonds now. This is higher than the effective interest rate of April 2018 Singapore Savings Bonds. If you see from the chart I plotted above, this is in fact the highest effective interest rate over the past 12 months.

If you decided to apply for May 2018 Singapore Savings Bonds, there is some good news. The Monetary Authority of Singapore (MAS) announced that the monthly issuance size of the Singapore Savings Bond (SSB) programme will be increased from S$150 million to S$200 million from this month. According to MAS, this is in response to the increasing demand for Singapore Savings Bonds.

The effective interest rate for April 2018 Singapore Savings Bonds gives you an effective interest of 2.31% if you hold it for 10 years. That will be a total of S$2,340 of interest collected if you purchase S$10,000 of Singapore Savings Bonds now.

Here is a previous post I did to compare the returns of the Singapore Savings Bonds against our normal savings account and traditional Time Fixed Deposits (Singapore Savings Bond versus Savings Account versus Fixed Deposits). Overall, the Singapore Savings Bonds emerge as the winner with the highest returns. Of course, the returns may not be fantastic if you compare against stocks or other investments of higher risk. But the Singapore Savings Bonds serves well as a contingency fund and as a war chest as well.

I have bought the Singapore Savings Bonds in October 2015 and September 2017 where the effective interest rate is 2.63% and 2.12% respectively. The best thing about Singapore Savings Bonds is that you can sell the existing bond of lower effective interest anytime and swap it with another one as it has no lock in period.

If you are like me where I am on a lookout for a good steal in the stock market but still have not spotted any, you can consider parking your money with Singapore Savings Bonds and collect interest while you wait for the next stock market crash!

There was a significant drop in November’s effective interest rate as compared to October’s effective interest rate for Singapore Savings Bonds. If you held the bond for ten years, October’s effective interest rate was 2.13% while November’s effective interest rate is 2.07%.

Recently, I have bought more of Singapore Savings Bonds. As such, Singapore Savings Bonds currently makes up 14% of my stock portfolio. Different people will have different reasons for buying Singapore Savings Bonds. As the current stock market is expensive and most REITs are yielding 6% or less, I find it non attractive to buy into the stock market right now. As such, I have treated the Singapore Savings Bonds as a savings account and also sort of an emergency fund if in event I do get retrenched.

Here is my previous post of Singapore Savings Bonds where I compare it with our savings account or fixed deposits.

Singapore Savings Bond versus Savings Account versus Fixed Deposits