SBAPR23 GX23040S – Singapore Saving Bonds (SSB) above 3% again. Buy or Bye?

SBAPR23 GX23040S – Singapore Saving Bond (SSB)

Today is the 1st day of March and the new SSB rates are out again!

We are back to above 3% again to 3.15%.

As mentioned in my post on 24 Feb 2023 (SAVERs – How to maximize your interest and my Market Transaction/Updates), the worldwide interest rates are going up and likely we get chance to buy higher SSB again as well as chance to take advantage of market weakness.

Let’s see the breakdown of the 10 years rate. 1st year is 3.01% whereas the last year is 3.53% with average at 3.15%. Great rates! S$700.0 million are offered with last day of application on 28 Mar 2023, 9pm. Upcoming payment is on 01 Oct 2023 with subsequent payments (until maturity): Every 6 months on 01 Apr and 01 Oct.

US Interest Rates

If we look at the US Treasury Rates, US6M reached 5.16% with US10Y at 4%! Yield curve is highly inverted again.

Inflation is not going away soon. FED not going to pivot so easily. For those FOMO (Fear of Missing Out) and enter the market in the recent rally, do consider keeping some cash in just case to either take advantage of higher fixed income like SSBs or simply wait for further weakness in market which is coming soon.

Past issue of SSBs

Let’s look at the rates of recent issues below and you will be able to see which I say the current month rate is decent.

The above are all the Singapore Saving Bonds (SSB) that I have bought previously (I only didn’t buy the March Issue because it is was lesser than 3% and I knew SSB rates are going up).

Buy or Bye?

Hence, should we buy or bye?

Let’s us recap the advantages of SSB first:

• Very safe – backed by Singapore Government
• Locked down decent rates of around 3% for 10 years.
• Easy to redeem and can redeem partial
• Liquidity needs maximum of 1 month where you can get your money back. Hence suitable as emergency fund.
• Limit of 200k should be good enough for most people.
• Can build Bond Ladder to get monthly income (which I already did)

Let’s us recap the disadvantages of SSB:

• Short term rates are lower than banks’ fixed deposits, money market funds such as MoneyOwl,etc of around 3.5% and above.
• Low returns
• 1 month liquidity to redeem your funds may be too long for people who need the funds immediately.

Hence the question is should we buy or bye?

For me I would do a wait and see method.

I have already kept decent amount of Funds in Singapore Saving Bonds and some funds in the higher 6 months Fixed Deposits and MoneyOwl WiseSaver etc. No point to keep putting funds into Singapore Saving Bonds that limit the growth of my funds. I would prefer to buy equities (also Crypto/Options) etc for higher yields as well as capital gain.

Since the last day of application is 28 Mar 2023, 9pm which is still far away. With the current market conditions, Mr Market would likely give chance for me to accumulate cheap assets soon 🙂

If he didn’t, then perhaps I would consider buying this month SSB (and/or redeem lower rate old SSBs).

What’s your plan?

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