Singapore Savings Bond (SSB) vs StashAway's Simple: Which Should You Select?
When it comes to saving and investing cash in Singapore, the landscape is replete with options. Among them, two standout choices are the government-backed Singapore Savings Bonds (SSB) and StashAway's Simple cash management product. In this in-depth exploration, we aim to equip you with the knowledge needed to make an informed decision based on your unique financial goals.
Understanding Singapore Savings Bonds
What are SSBs?
Singapore Savings Bonds stand out as a unique category of Singapore Government Securities (SGS) tailor-made for individual investors. Offering a blend of security, flexibility, and long-term potential, SSBs are an attractive option for those seeking stable growth.
Benefits of SSBs
Safe Haven: One of the key attractions of SSBs is their backing by the Singapore Government, providing investors with a sense of security. Notably, investors can redeem their bonds at any time, ensuring capital preservation without the spectre of capital losses.
Long-term Growth: Investors in Singapore Savings Bonds can commit for up to a decade, enjoying interest rates that progressively increase over time. This long-term approach translates to assured growth, making SSBs a compelling choice for those with a patient investment horizon.
Flexibility Unleashed: Unlike many traditional investment vehicles, SSBs afford investors the flexibility to redeem their bonds within a month, penalty-free. This feature empowers investors to adapt to changing financial circumstances with ease.
Exploring StashAway's Simple
Introducing StashAway's cash management product, Simple, which opens doors to two distinct payment avenues: cash and Supplementary Retirement Schemes (SRS) funds.
Key Features & Advantages
No Minimum Balance: StashAway Simple™ imposes no minimum balance requirements, making it accessible to a wide range of investors.
Unlimited Balance Earning: Enjoy the freedom of earning returns on your entire balance, without any upper limit.
No Investment, Insurance, or Salary Requirements: Simplicity is key with StashAway's Simple, as there are no complex requirements to meet.
No Restrictions on Withdrawals or Transfers: Need access to your funds? StashAway Simple™ grants you the flexibility to withdraw or transfer without unnecessary restrictions.
Swift Setup: Skip the paperwork hassles with StashAway Simple™—set up your account in minutes and start managing your cash seamlessly.
Comparison of SSBs & Simple
1. Safety and Security
In this head-to-head comparison, both SSBs and StashAway's Simple place a premium on safety and security.
Singapore Savings Bonds benefit from the rock-solid backing of the Singapore Government, ensuring capital protection for investors.
StashAway Simple™ takes an ultra-low-risk approach by investing in a money market fund and an enhanced liquidity fund. This shields investors from market volatility, offering a secure environment for their cash.
2. Accessibility and Liquidity
How to apply for and buy Singapore Savings Bonds? Individuals can utilise various channels depending on their preferred method of payment. For those opting to use cash, the application process can be completed through DBS/POSB, OCBC, and UOB ATMs or Internet banking portals, as well as through OCBC's mobile application. It's essential to have your CDP (Central Depository) account number ready when initiating the application.
Alternatively, for applicants using Supplementary Retirement Scheme (SRS) funds, the process involves applying through the internet banking portal of the respective SRS Operator. It's worth noting that personal visits to bank counters for in-person applications are not accepted. By following these specified methods, interested individuals can seamlessly apply for and acquire Singapore Savings Bonds, ensuring a convenient and efficient process.
Accessing Simple is as effortless as creating an account via the StashAway APP and selecting the Simple cash management product. With a user-friendly interface, the APP is designed to be quick and straightforward. Users can simply navigate through the online platform, providing necessary information and preferences along the way. Whether you're a seasoned investor or new to financial management, the simplicity of the APP ensures that accessing and utilising this cash management product is a hassle-free experience. Enjoy the convenience of a straightforward APP that puts you in control of your financial goals with ease.
Next, let's explore the liquidity of SSB and StashAway's Simple.
Singapore Savings Bonds provide liquidity by allowing investors to redeem their bonds at any time during the 10-year tenor without incurring penalties.
StashAway Simple™ takes the lead in liquidity, enabling investors to withdraw their funds at any time, offering unparalleled flexibility.
While SSB redemptions are processed by the 2nd business day of the following month, StashAway Simple™ ensures quick access to cash, with withdrawals taking between 2 to 3 business days for personal bank accounts and 3 to 4 business days for SRS withdrawals.
3. Returns and Yields
Investors are naturally keen on returns. Let's compare the potential returns and yields of Singapore Savings Bonds and StashAway's Simple.
SSB Gradual Growth: With SSBs, investors can enjoy increasing returns over a 10-year period, boasting a first-year interest rate of 3.3% and a compelling 10-year average return of 3.4%.
StashAway Simple™ Projections: StashAway's Simple projects a return rate of 3.7% p.a. (net of fees), leveraging capital appreciation and quarterly rebates for potentially higher yields.
4. Fees and Costs
In the realm of fees, transparency is key. Let's delve into the fee structures of SSB and StashAway's Simple.
SSB Transaction Fees: Singapore Savings Bonds come with a $2 transaction fee for each application and redemption. It's important to note that transaction fees are non-refundable, even in the case of unsuccessful application requests.
StashAway Simple™ Pricing: StashAway's Simple™ is committed to transparency with a management fee of 0.15% p.a. The projected rate after all fees stands at an attractive 3.7% p.a.
Choosing What Aligns With Your Goals
In concluding this exploration, the choice between SSB and StashAway's Simple should align with your specific financial goals, risk tolerance, and liquidity needs. Both options offer safety and accessibility, but StashAway's Simple™ introduces potential advantages with higher projected yields, unmatched convenience, and transparent fees. As you embark on your cash management journey, consider the unique features each option brings to the table and align your choice with your financial aspirations.