Next month’s Singapore Savings Bond (SSB) June 2024 issue offers a very attractive 3.33% average yield over 10 years. Applications close 28 May 2024 9pm. This month’s SSB yield is the 3rd highest in recent times, only surpassed by the 3.47% yield of Dec 2022 SSB and the 3.40% yield of Dec 2023 SSB.
Why This Month’s SSB is Worth Considering
Although interest rates are expected to stay higher for longer, SSB yields have not been able to sustain above 3.4%. Maybe third time’s a charm, but I don’t rely on the off-chance.
10-year SGS bond yields have started to soften again after hitting its peak of close to 3.5% in late April 2024. Currently, rates are hovering around 3.3% so unless rates turn back upwards soon, SSB yield for the following month is unlikely to surpass the current offer of 3.33%.
Banks have started to lower interest rates on savings accounts. Even fixed deposit rates have not gone back up despite the Fed putting rate cuts on hold. I think unless inflation rises again significantly prompting another rate hike, interest rates are unlikely to surpass recent highs.
I’m Applying for S$18K SSB
Due to attractive yield, I’m applying for S$18k worth of SSB this month. I’ll also likely to be redeeming $8k of my lowest yielding SSB from April 2023 issue. If I get fully allocated $18k, then next month I’ll redeem $10k from Nov 2022 issue, the next lowest yield.
Besides getting slightly higher yield, I’ll be able to extend the tenure out by a few months. I won’t lose out much since the SSB yield curve is actually pretty flat, i.e. first year yield is not that much lower than later years’ yields. Not sure if you can tell from the chart, but the entire yield curve for June 2024 SSB is above the April 2023 SSB one.
Refer to my SSB tracker for more details.
Final thoughts
IMO, I think interest rates might hover around 3.3% for a bit, but I don’t think they will exceed 3.5% long enough to push yields meaningfully past the 3.4% mark. This month’s 3.33% yield SSB seems like a good chance to pick up some especially if you don’t hold any. Hopefully demand will not be too crazy, since attention on SSB has waned somewhat the past year or so.
Since my cash position is also pretty high now, in view of high equity prices, I might consider parking slightly more into SSB. Currently, only a portion of our emergency funds and $10k of idle cash from investment funds are in SSB.
If the gap between short-term rates and SSB narrows further, I might just deploy more into SSB. After all, there’s always the option of early redemption without penalty for SSB.
Are you applying for SSB this month?
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Disclaimer: This is not financial advice. I am not professional financial advisor nor do I work in the finance industry. Anything I write here is purely my personal opinion. Please do your own research and due diligence before investing into anything. All investments come with associated risks. Best to consult a financial advisor if you’re still unsure.
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