Singapore Savings Bonds yield 3.06% – SSB yields to go even higher next month? Buy now or wait?



So I recently received this question from an FH reader:

“Would you recommend to buy SSB this month or wait till next month?

Or is this a time frame allowable where you can buy this month, then if next month rates are higher, redeem and put into next month’s SSB?

Thank you!”

My response, for the record, was:

“I would say you wait until the end of the month (before the deadline to buy SSBs) to make this decision.

By then you will be able to have some idea of what next month’s SSBs yields would look like (based on this month’s SG10Y yield), and can better make this decision.

I’ll try to do a fuller article on this towards the end of the month.”

Well, it’s almost the end of the month now.

And the deadline to apply for Singapore Savings Bonds is next Thursday (25 April 2024).

So I figured I would come back to this question, and try to answer 3 key questions:

  1. Are this month’s Singapore Savings Bonds a good buy?
  2. Will Singapore Savings Bonds yields go even higher next month?
  3. Should you buy this month’s SSBs, or wait for next month?


Latest Singapore Savings Bonds yield 3.06% – are they a good buy?

Latest yields on the Singapore Savings Bonds set out below.

You’re getting:

  • 2.99% yield for the first 6 years
  • 3.06% yield for 10 years

Main benefit of Singapore Savings Bonds is the 10 years lock in + ability to redeem any time

Note that this is risk free yield locked in for 10 years, that you can redeem any time with no risk of capital loss (backed by Singapore government).

So yes sure, 2.99% is not as high as the 3.75% on the latest 6-month T-Bills.

But considering you can lock in the rates for 10 years, and yet get your money back any time, I would say they are a pretty decent buy.

Singapore Savings Bonds as part of a broader cash management strategy

Nobody is saying to put 100% of your cash into Singapore Savings Bonds.

But one way to do it is to put certain percentage of your cash in SSBs, with the rest in T-Bills / high yield savings account, as part of a broader cash management strategy.

This protects you against the risk that interest rates get slashed in the next 12 – 18 months, and your T-Bills or UOB One account cash is refinanced at much lower interest rates.

So diversifying into Singapore Savings Bonds provides some protection from this (by locking in yields for 10 years), but of course at the expense of lower short term yields.

Singapore Savings Bonds yields will likely go higher next month

That being said.

Next month’s Singapore Savings Bonds are likely to have even higher yields.

Singapore Savings Bonds track the average Singapore 10 year yield for the previous month.

This means that next month’s SSBs, will track this month’s average 10 year yields.

And boy – 10 year yields have been marching up relentlessly this month.

Latest Singapore 10 year yields have gone as high as 3.4%:

What would yields on the next Singapore Savings Bonds look like, approximately?

Rough projections.

I think you could see next month’s Singapore Savings Bonds come in at:

  • 3.2% for the first 6 years (approx.)
  • 3.3 – 3.4% for 10 years.

Long story short – yes next month’s Singapore Savings Bonds are likely to have higher yields.

Powell’s Pivot to the Pivot – only 1 rate cut in 2024?

On Tuesday, Powell at a panel discussion gave the following remarks:

If price pressures persist, he said, the Fed can keep rates steady for “as long as needed.”

“The recent data have clearly not given us greater confidence and instead indicate that is likely to take longer than expected to achieve that confidence,”.

That’s a pretty big change of tone from Powell.

For much of this year he has stuck to the position that despite hot inflation data, the Feds still see themselves cutting interest rates in 2H 2024.

With this comment, he finally acknowledges the hot inflation, and its potential impact to delay interest rate cuts.

In some ways, it’s basically walking back the “pivot” in late 2023.

Market only pricing in 1 interest rate cut in 2024

You can see latest market pricing below.

Only 1 interest rate priced in for 2024 now, to start in Sep 2024.

With a 1.0% chance of a rate hike.

Considering in Jan the market was pricing in 7 rate cuts, this is a whopping shift in market expectations.

As shared with FH Premium readers, I would expect this huge shift to affect stocks / REITs at some point.

We’re already seeing this affect REIT prices, leading to pretty attractive prices across the board which I may buy at (see my full REIT / Stock watchlist on FH Premium).

Whatever the case, less rate cuts are priced into the market.

We pretty much know that Singapore Savings Bonds will have higher yields next month (because it tracks this month’s yields).

But with this news from Powell, you may see Singapore Savings Bonds yields stay high the next month or two (or more) as well.

So buy Singapore Savings Bonds now or wait?

The decision of whether to buy SSBs this month or wait ultimately comes down to 3 questions:

  1. How much allotment limits would you see next month?
  2. How much you are looking to apply
  3. How much cash you have on hand

How much allotment limits would you see on Singapore Savings Bonds next month?

The main risk with waiting for next month, is that in the past whenever we see Singapore Savings Bonds cross the 3.1% yield for the first year mark.

We see demand jump, and allotment limits drop.

The last time yields were these attractive was Nov / Dec 2023, and allotment limits dropped to $47,000 and $20,000 respectively:

BTW – we share commentary on Singapore Investments every week, so do join our Telegram Channel (or Telegram Group), Facebook and Instagram to stay up to date!

I also share thoughts on Twitter regularly.

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How much Singapore Savings Bonds you are looking to apply for?

So it depends on how much you are looking to apply for.

If you’re looking to apply for $200,000 worth of SSBs at one go, there is a risk that might not be possible next month.

In which case you may want to apply some now.

If you’re looking at applying for $30,000 only.

Then there’s a good chance you should be able to get it filled next month, and maybe you can afford to wait.

How much cash you have on hand (to buy SSBs)?

It also matters how much cash you have on hand to “cycle” through Singapore Savings Bonds.

If you have a lot of liquidity lying around.

You could just apply some SSBs this month.

The if next month’s rates are good, you just redeem some, and apply for more.

Redeeming and applying for Singapore Savings Bonds in the same month

Note that you can redeem and apply for SSBs in the same month to get around the allotment limits.

To give an example, let’s say you already have $200,000 SSBs today (the maximum allotment per person).

You can submit an application to redeem $50,000 SSBs.

And then submit an application to buy $40,000 SSBs.

And that works – you’ll be able to buy $40,000 SSBs next month.

I have done this myself before and can confirm it works.

Only problem is that you’ll only get the $50,000 in SSBs that you redeemed at the start of the next month, so you need the spare $40,000 cash to on hand to pull off this “trick”.

Hence the question of how much cash you have on hand.

So buy Singapore Savings Bonds now or wait?

As you can see, the answer to this question depends very much on your personal situation.

What we know, is that next month’s Singapore Savings Bonds are likely to have better yields.

What we don’t know, is how popular they will be, and what are the allotment limits.

If you’re really kiasu and want to buy a lot of SSBs, I would say just go ahead and buy some now.

If you’re like me and you already have enough SSBs, I would say wait for next month’s better yields.

But really, there’s no right or wrong here, and you have to decide what works for you.

Singapore Savings Bonds application timeline

Last day to apply is 9pm on Thursday, 25 April.

Same timing for the redemption of Singapore Savings Bonds.


This article was written on 19 April 2024 and will not be updated going forward.

For my latest up to date views on markets, my personal REIT and Stock Watchlist, and my personal portfolio positioning, do subscribe for FH Premium.


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