Analysing which SSB to Redeem | Real Case Study

 

With potential interest rate cuts next year in mind, I am planning on my Singapore Savings Bonds (SSB) purchase and redemption for this month.

I think the SSBJan24 could be the last or one of the last SSBs with 10 year average yield above 3%.

I logged in to SSB Portal using SingPass to verify my existing SSB portfolio.

Upon login, there is a dashboard showing an overview of our SSB portfolio, total interest amount to be received in future, breakdown of SSB investments by Cash or SRS, as well as the amount we could further invest before hitting the individual limit of S$200k.

I currently hold S$150k of SSB and has S$50k to go before hitting the individual limit.

Clicking on "View Details", we can zoom into every single SSB in the portfolio.

The default view presents the SSB based on most recent tranche from top to bottom.

We could use the filters at the top table row to filter the SSB.

In this case, I wanted to find out which SSB in my portfolio has the lowest average 10 year yield. Hence I clicked on the down arrow under "Average 10Y Interest Rate" to filter from lowest to highest.

From the filtered results, SBSep18 has the lowest Average 10Y Interest Rate at 2.44%.

SBJan19 has the 2nd lowest Average 10Y Interest Rate at 2.45%.

However, the Next Payout Amt of SBSep18 of $130 is actually higher than the Next Payout Amt of SSBJan19 of $122.50.

By clicking on the name of the SSB, we can drill down into the details of each SSB.

So I clicked on "SBSep18 GX18090T" to view the details.

From the detailed view, SSBSep18 is in its 6th year with upcoming $130 of interest payable in Mar 2024. 

I did the same for SSBJan19 to see that SSBJan19 is in its 5th year with upcoming $122.50 of interest payable in Jan 2024.

As I plan to make a redemption to apply for SSBJan24 with a starting yield of 3.0%, it makes more sense to redeem SSBJan19 and replace it with SSBJan24. Furthermore, SSBJan19 is running at 2.5% currently compared to SSBSep18 running at 2.6% currently. 

I should be able to collect the principal amount of $10k together with the upcoming $122.50 interest on 2 Jan 2024 if I were to redeem SSBJan19 this month.

Ideally I should redeem both of these underperforming SSBs but there is no guarantee that the allotment for SSBJan24 is above S$20k for me to replace both SSBs with SSBJan24.

Final Decision: To redeem SSBJan19 before 26 Dec, 9pm dateline for electronic application.

Takeaway from this case study: By logging to SSB portal, we could perform simple analysis to make informed data-driven decision on SSB redemption and purchase to manage our portfolio effectively.

Thank you all for reading.

With love & peace,

Qiongster