The Jan 2024 tranche of Singapore Savings Bonds (SSB) has an average yield of 3.07% over 10 years.
The first 7 years yield a flat 3% per annum; 8th year yields 3.2% p.a and 9th, 10th years yield 3.27% p.a.
Even though such yield is lower than other low to risk-free alternatives such as T Bills and money market funds which easily yield more than 3.5% currently, it is higher than many fixed deposit rates on offer by local banks as well as CPF OA rate of 2.5% p.a.
If we also consider the great flexibility, liquidity of SSB for redemption and long-term lock down at above 3% p.a for the next decade, then this tranche of SSB is fairly enticing for us to park our spare cash at zero risk, capital guaranteed for the mid to long-term.
We could redeem SSB anytime, earning interest at 3% in the short-term 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. Do note that the redemption process of SSB can be up to 1 month of lead time.
As interest rate cuts are on the cards for 2024 by the Fed, this SSB could be one of the last tranche to have an average yield of above 3%. We should expect the average yields for next few tranches of SSBs to be in the range between 2.6% to 2.9%.
I decided to apply for $20k of this Jan 2024 tranche using my war chest.
There it goes.
S$1.1b is up for grabs.
The first payment will be on 1 Jul 2024 and this bond will mature on 1 Jan 2034.
If you are interested in this tranche of SSB, do note that the application dateline is 26 Dec 2023, 9pm for online applications.
At the same time, I also redeemed an old tranche of SSB (SBJAN19 GX19010T) with an average yield of 2.45% and currently only yielding 2.45% in its 5th year. It is hence a no brainer decision to recycle the funds.
Thank you for reading.
With love & peace,
Qiongster
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