Redeemed Singapore Savings Bonds (SBAPR19 GX19040X)

 

For the very first time, I redeemed an old Singapore Savings Bonds (SSB) which I subscribed in Mar 2019. 

This capital recycling act costs $2. I should be able to get back my funds of $10k, together with pro-rated accrued interest before 2 June 2023.

There it goes.

The April 19 tranche of SSB has only an average yield of 2.16% over 10 years. It is running in the fifth year now yielding 2.12% p.a which seems attractive in 2018 but very low in today's high interest environment.

Thus it is a no-brainer to get rid of it for the June 23 tranche which yields an average of 2.81% over 10 years.

This June 2023 tranche is also not very appealing considering that other low to risk-free alternatives such as T Bills and bank fixed deposits easily yield more than 3.5% currently.

However, if we consider the great flexibility, liquidity of SSB for redemption and long-term lock down at above CPF OA yield for the next decade, then this tranche of SSB is fairly decent for us to park our spare cash at zero risk. 

Furthermore, both short-term and long-term treasury bond yields have declined recently and the interest rate hikes have sort of peaked with the markets factoring in interest rate cuts next year. These could signal that the yields of SSB declining in next few months.

We could redeem SSB anytime in the coming months, earning interest at 2.81% while getting back our capital for deployment to other investments or large item purchases unlike T Bills and bank fixed deposits which would incur losses or forfeit of interest with premature withdrawals.

Thanks for reading.

With love & peace,

Qiongster