2.01% Jan 19 Singapore Savings Bond. Really that good?

Average interest per annual for 1-year and 10-year period

The Singapore Saving Bond's interest rate for 1 year holding has been making new high for the past three consecutive months. The issue in Jan 19 is not only a new high but it is also the first time the rate has exceeded 2%. Sounds attractive?

In fact, the Jan 19 issue may not be that attractive if the duration of holding is taken into consideration. This is because the long term average interest per annual has fallen to just 2.45% for holding 10 years. If you compared it to last month issue for Dec 2018, you will notice the average interest rate per annual is only higher for the first two years. After which, the rates are all lower than the previous issue. This means that the Jan 19 issue is only attractive if your intention is to hold for 2 years. If you are planning to hold on for more than 2 years, the previous issue would have been a better choice. But is too late to regret if you have missed the Dec 18 issued which was oversubscribed.

This raises the question of whether should I switch my previous month bond with the new issue. The deciding factor for me is the duration which I intend to hold. Since there is a possibility that I may hold the Dec18 issue for more than 2 years and I have not max out my SSBs holding, I would be adding the Jan 19 issue but would not be switching out my Dec 18 issue. The Jan 19 issue will be for holding 1-2 years, and the remaining for 10 years.

From what I see, most of the bonds issued in 2016 are 2017 are inferior. If you are still holding on to any bonds issued in those years, you should be reviewing them and replacing them where necessary. The following table is for your own reference.

Other Issues of SSBs Compared to Jan 2019  Issue

MAS has announced that from 1 February 2019, the Individual Limit for SSBs will be increased from $100,000 to $200,000 and purchases via Supplementary Retirement Scheme (SRS) funds will be allowed. By allowing purchases with SRS, we could be looking at higher demand for SSBs as SRS funds are only earning nominal saving accounts interest rate. Those risk-adverse individual will be shifting their SRS fund into SSBs. Together with the increase in Individual Limit, the increase in demand for SSBs could possibly reduce the allotment for each person in the event of oversubscription.

January 2019 Issue
Details on this month SSB can be found on SGS website.


  1. Symptom of flattening yield curves, which is also happening to govt bonds of many other developed countries.

    But no worries of inverted yield curve for SSB thanks to a product feature:
    Interest rates are "Based on the average interest rates of benchmark SGS the month before, and may be adjusted to maintain the 'step-up' feature if market conditions do not allow it".

    From the above, can also predict quite accurately what the interest rates will be for next month's SSB by averaging the rates for the different tenors of SGS over the last 30 trading days.

    Do this towards the end of the 3rd week of the month to see whether want to redeem any existing SSBs in order to buy the next SSB.


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