Monday, August 28, 2023

Applied for Singapore Savings Bonds (SBSEP23 GX23090F)

The Sep 2023 tranche of Singapore Savings Bonds (SSB) has an average yield of 3.06% over 10 years.

The first 7 years yield a flat 3.01% per annum; 8th year yields 3.14% p.a. and 9th, 10th years yield 3.2% p.a.

This is 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 3% p.a and above CPF OA yield of 2.5% p.a. for the next decade, then this tranche of SSB is fairly decent for us to park our spare cash at zero risk, capital guaranteed for the long-term. 

We could redeem SSB anytime , earning interest at 3.01% 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.

I decided to apply for $10k of this Sep 2023 tranche using my idle war chest funds.

There it goes.

S$600m is up for grabs. Due to the relatively modest yield, I anticipate mediocre popularity for this tranche and almost guaranteed allotment of at least $20k per person.

The first payment will be on 1 Mar 2024 and this bond will mature on 1 Sep 2033.

If you are interested in this tranche of SSB, do note that the application dateline is on today, 28 Aug 2023, 9pm for online applications.

Both short-term and long-term treasury bond yields have increased recently and these could signal that the yields of SSB will be higher in next few months. I am happy to inject more cash into SSB in the next few months if the yields stay above 3%. My ultimate aim is to max out the personal limit of S$200k.

Thank you for reading.

With love & peace,

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