The July 2024 tranche of Singapore Savings Bonds (SSB) has an average yield of 3.3% over 10 years.
The first 6 years yield a flat 3.26% per annum; 7th year yields 3.29%, 8th year yields 3.38% p.a and 9th, 10th years yield 3.42% 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 by end 2024, this SSB could be one of the last tranches to have an average yield of above 3%.
I decided to apply for $15k of this July 2024 tranche using my redemption proceeds from older SSB and war chest funds.
There it goes.
S$1.1b is up for grabs.
The first payment will be on 1 Jan 2025 and this bond will mature on 1 Jul 2034.
If you are interested in this tranche of SSB, do note that the application dateline is today on 25 Jun 2024, 9pm for online applications.
At the same time, I also redeemed an old tranche of SSB (SBDEC18 GX18120X) with an average yield of 2.57% and currently only yielding 2.73% in its 6th year. It is hence a no brainer decision to recycle the funds.
Thank you for reading.
With love & peace,
Qiongster
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