Friday, 1 July 2022

Singapore Saving Bonds Yield Offers Attractive Current Yield of 2.7% For Risk Adverse Investors.

For years, I have been nagging at my wife to put her money into the Singapore Savings Bonds ("SSB") as she is only willing to invest a very tiny part of her overall excess funds into stocks while preferring to hoard the bulk of her cash savings in the bank which make her feels "secure and safe". I was astounded to see that the SSB yield rising to 2.7% for the recent July 2022 tranche. The August tranche which just opened today (1st July 2022) for application is expected to give an even better yield due to rising interest rate environment. What I like about the SSB is that any individuals can redeem it in any month without any financial penalty should one need the cash urgently. Decent risk free yield coupled with high liquidity makes the SSB a wonderful investment particularly for risk adverse investors. 

The main difficulty for my wife is that she tried many times to try to subscribe but gave up as she finds it bothersome to find out on how to apply and asserted that this cannot be done online. I decided to help her apply this time round. Basically, the SSB is available on ATMs and also conveniently on internet banking of the major local banks (DBS/POSB, UOB & OCBC). For DBS/POSB users, please see illustrative below on where to apply for the SSB. It should be almost the same for the other bank portals. 
For DBS account, go to "Invest" and then click on "Singapore Government Securities".

Then click on I want to apply for "Singapore Savings Bonds".
Parting Thoughts
The individual limit for SSB has been raised to S$200,000 (from S$100K) from 1st February 2019 by the Monetary Authority of Singapore. The interest will be paid to you every six months after issuance and acts a little similar to dividend investing. Overall, the SSB is good for risk adverse investors. This is definitely better than leaving huge sums of cash in saving deposits and letting inflation erodes its value.

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