Singapore Savings Bonds (SSB) Allotment Update [April 2024]

If you've been closely monitoring the SSB allotment updates, the recent unexpected dip might have caught your attention. In Feb 2024, the Singapore Savings Bonds (SSB) witnessed an unforeseen shift when the 10-year average return dipped to 2.88%, stirring discussions among investors. But in the most recent month of April 2024, the rates are re-adjusted to a more normalized.

This development prompts a closer examination of its implications on investment portfolios, especially for those invested in or considering SSB as a part of their financial strategy. Understanding these changes is crucial for making informed decisions in the evolving landscape of Singapore investments.

What are SSB Allotments, and How Do They Work?

Singapore Savings Bonds (SSBs) are a unique investment platform offering a secure way for individuals to invest their savings. Each month, the Singapore government opens applications for a new batch of bonds, allowing individuals to invest up to a certain limit. 

The allotment process is designed to be fair, ensuring that if the demand exceeds the total amount available, bonds are distributed in a way that prioritizes smaller investors, aiming for broad accessibility across the population. This system supports both the government's funding needs and individuals' financial portfolio diversification.

What Can We Learn About the April 2024 SSB Allotment?

In the most recent SSB release (SBMAY24 GX24050X), you can lock in a 2.99% interest rate for a year. Hold onto it for 10 years, and you'll enjoy an average rate of 3.06% annually.

Let's look into the details of April 2024 Singapore Savings Bond (SSB) Issuance, including application dates and interest rates.

The interest rate timetable is as below:

Should I Invest in SSB?

The current 10-year average interest rate of 3.04% offered by the latest SSB surpasses historical averages, indicating a potentially favorable opportunity. Furthermore, compared to the preceding issuance where the 10-year average stood at 2.88%, this latest offer presents an improvement. However, it's worth noting that the current rate falls short of the peak seen in December 2022, where the 10-year average interest rate soared to 3.47%.

Comparing SSB with T-bills/SGS Bonds

SGS Bonds and T-bills offer a fixed interest rate with a range of maturities and can be traded in the secondary market as well. Investors can allocate larger sums of money with no overall limit, starting from S$1,000 per transaction. 

On the other hand, Savings Bonds offer a unique proposition. They provide interest rates that escalate the longer an investor holds them, with a fixed 10-year maturity period. This structure appeals to individuals seeking flexibility, as they can redeem their bonds in any month and receive the principal along with accrued interest by the second business day of the following month. Additionally, Savings Bonds require a relatively low minimum investment of S$500, capped at S$200,000 overall per individual.

As for the interest rates, the latest comparison of rates between them in 1 Apr 2024:

Comparing SSB with Fixed Deposits

When comparing Singapore Savings Bonds (SSB) with fixed deposits, it's essential to understand their distinct features and how they cater to different investor needs. Fixed deposits offer a stable bank interest rate, providing a dependable choice for short to medium-term investments, with predetermined rates remaining constant throughout the deposit period. Conversely, SSBs provide a secure, government-backed investment avenue, offering returns that progressively increase over time, typically tied to Singapore's long-term government securities rates and subject to adjustment with each new issuance of the bonds.

Some of the highest fixed deposit rates offered by banks can reach up to 3.35%, offered by Bank of China. Alternatively, you can also check out this comprehensive list of fixed deposit rates offered by banks in Singapore.

The Alternative: StashAway Simple™ Guaranteed

Investing in Singapore Savings Bonds presents a low-risk option for savers, but it can also introduce complexities and limitations for those seeking greater flexibility and potentially higher returns. This is where an easier, more adaptive investment channel like StashAway Simple™ Guaranteed comes into play, offering a solution that aligns with varying risk profiles and financial goals.

StashAway Simple™ Guaranteed is designed as a formidable alternative for investors looking for a straightforward yet effective way to grow their savings. It provides a guaranteed return, blending the ease of a savings account with the growth potential of a diversified investment portfolio, making it an attractive option for those reassessing their investment strategies.

StashAway Simple Guaranteed Interest Rates (April 2024):

How Can I Apply For SSBs?

Criteria to apply for SSBs

Singapore Savings Bonds are available to individual investors aged 18 and above. Interestingly, both foreigners and non-Singapore residents are eligible to invest in SSBs, making them accessible to a broad audience.

How to apply for SSBs (Cash)

To invest in SSBs using cash, you must first have a valid bank account with DBS/POSB, OCBC, or UOB. Additionally, an individual CDP Securities account linked to the bank account will be required to manage interest payments and redemption proceeds.

How to apply for SSBs (SRS)

If you are applying for SSBs via the Supplementary Retirement Scheme (SRS), you will need to establish an SRS account with DBS/POSB, OCBC, or UOB. Importantly, purchasing SSBs does not necessitate having a trading account with a securities broker.

Fees And Investment Limits

Each SSB application incurs a platform transaction fee of $2. And while the minimum investment starts at SGD$500, the maximum allowable investment is capped at $200,000 per investor.

Application timeline

The Monetary Authority of Singapore (MAS) announces SSB launch details on their site well in advance to ensure transparency. Application periods open on the first business day of the month and close on the fourth last business day. Refunds for unsuccessful applications and allotment results are announced towards the month's end, instilling confidence in the process.

What Are My Next Steps?

Given the insights from the April SSB Allotment, it's advisable to think about diversifying your investment portfolio. With the April SSB Allotment on the horizon, this could be an opportune moment to secure higher interest rates before they potentially decrease.

For those who are more risk-averse, exploring stable investment alternatives beyond savings bonds is always an option. Investment platforms like StashAway offer a variety of investment solutions tailored to fit different risk profiles, providing a balance of stability and growth potential.

By incorporating both traditional investments like SSBs and modern platforms such as StashAway into your strategy, you can confidently navigate the fluctuating financial landscape. This approach ensures your portfolio is well-equipped for both growth and stability. For more insights on Singapore’s investment landscape and beyond, check out our insider investment guides.