The interest rate of Nov 2022 issue of Singapore Savings Bond (SSB) is at record high of average return for 10 years at 3.21%. The previous record was in Aug 2022 when it hit 3.0%. The maximum allotment size back in Aug was $9,000.
We can expect to Nov issue to be high demand, resulting in low allotment size.
The details of the Nov 22 SSB issue can be found here : https://www.mas.gov.sg/bonds-and-bills/auctions-and-issuance-calendar/issuance-singapore-savings-bond?issue_code=GX22110A&issue_date=2022-11-01
In a rising interest rate environment, its prudent to invest in short tenor bonds. So why am I subscribing to a 10 year bond? Here are my reasons:
- The great thing about SSB is that I can redeem my SSB anytime before it matures. I can get back the principal plus accrued interest. This acts like an insurance, in which I am not locked in to the 10 years, in case interest rates continues to rise much higher than the 3.21%.
- 3.21% 10 years ais a very good return relative to the historical returns invested in the Singapore government. It is higher than CPF’s 2.5%. It is not possible to invest in SSB using CPF though. But I can use SRS, and cash.
- The quantum size is not high. Its like dollar cost averaging entries into the SGS bond market. I do not expect to get allocation of more than $10k per application.
You can apply through any of the 3 local banks’ internet portals.
The applications for the Nov 22 SSB issue closes on 26 Oct 2022 9pm.
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