2.57% November 2018 SSB issuance

November SSB issuance saw the average per annum interest rate raised by 0.04% from the previous month. On top of being the 2nd highest issuance this year, at 2.57% this is competitive with the current CPF interest rate of 2.5%.

Despite this issuance being only the 2nd highest for the year. What is interesting, is that the near term (Yr 1 – Yr 5) rates are increasing at an increasing clip. This provides a good alternative to leaving money in the bank.

Since repaying part of the home loan in Mar and Aug, my hurdle rate for CPF-OA has since fallen to 2.5%. As such, I have decided to take a small slice of this issuance as part of the wedding savings plan.

Mth Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Average
Jan 1.32% 1.58% 1.71% 1.82% 1.99% 2.22% 2.43% 2.65% 2.86% 3.06% 2.13%
Feb 1.55% 1.59% 1.67% 1.77% 1.91% 2.07% 2.26% 2.44% 2.61% 2.75% 2.04%
Mar 1.42% 1.55% 1.73% 1.92% 2.08% 2.23% 2.38% 2.53% 2.69% 2.87% 2.11%
Apr 1.42% 1.77% 2.02% 2.25% 2.41% 2.51% 2.59% 2.67% 2.79% 2.97% 2.31%
May 1.65% 1.95% 2.14% 2.28% 2.42% 2.54% 2.62% 2.72% 2.84% 3.00% 2.39%
Jun 1.68% 2.14% 2.21% 2.21% 2.30% 2.52% 2.67% 2.81% 2.96% 3.12% 2.43%
Jul 1.72% 2.19% 2.35% 2.42% 2.56% 2.77% 2.91% 3.06% 3.22% 3.41% 2.63%
Aug 1.78% 2.16% 2.37% 2.54% 2.67% 2.76% 2.81% 2.86% 2.95% 3.11% 2.57%
Sep 1.75% 2.02% 2.22% 2.39% 2.52% 2.60% 2.66% 2.73% 2.82% 2.97% 2.44%
Oct 1.74% 2.08% 2.22% 2.31% 2.42% 2.55% 2.63% 2.72% 2.83% 2.97% 2.42%
Nov 1.80% 2.09% 2.27% 2.42% 2.54% 2.63% 2.69% 2.75% 2.84% 2.98% 2.48%
Dec 1.89% 2.19% 2.38% 2.54% 2.66% 2.73% 2.77% 2.82% 2.90% 3.04% 2.57%

SSB highest interest rates in Jul (2.63%), followed by Aug & Dec (2.57%)

 

2.42% October 2018 SSB issuance

The latest SSB issuance is out, and is frankly not that exciting. Overall, the interest rates have remained fundamentally the same. The overall yield has fallen by 0.02% from the previous month and the 1-year yield is down by 0.01%.

2.44% Sept-18 vs 2.42% Oct-18Nothing fancy about the issuance, but investor’s who have a time horizon of 2 years for the bond can note that the 2-year yields are slightly higher than the last issuance.

I think the bond issuer’s are fully cognizant about how the SSB’s are not supposed to be “high yielding” investments. Especially since there have been reports of falling savings rate in the banks. Not a surprise either since their interest rates are so low.

2.42-Oct.18-SSB
Here is an incomplete list of the past SSB issuances.

2.44% September 2018 SSB issuance

The latest issuance of SSB for September is out!

Unfortunately, it seems that the government is unlikely to hand out more free money. The overall interest rates for SSB is falling, with even the first year rates not being as high as the previous allocation of 1.78%. I doubt the increased allocation of S$50mil would be fully allocated.

2.44% Sept SSB

Overall, if you already managed to grab a tranche of the SSB during the last August round, this current tranche would be unlikely excite you. Hopefully the next round would be better.

2018 Aug vs Sept SSB compare
Lower overall yield. Yield expectations seem to have tapered

Here is an incomplete list of the past SSB issuances.

2.57% August 2018 SSB issuance

The latest round of SSB interest rates came as a surprise. While the short term interest rates went up by 0.06%, the long term interest rates actually fell by the same number.

Frankly, I was expecting both figures to go north after the last issuance, but I guess that was wishful thinking on my part. Still I think the latest issuance still meets the expectations of most investors and that the latest tranche will be over subscribed.

Aug_18_SSB

Comparing the with the last SSB issuance, it seems like most holders can still subscribe to the latest issuance, but with a time horizon of 6 years, before the bond begins to underperform the last issuance.

2018 Jul vs Aug SSB Compare

Here is an incomplete list of the past SSB issuances.

 

Why the latest SSB is better than saving in a Bank

The July round of Singapore Savings Bonds (SSB) is out, and the yields are impressive. At an average of 2.63% not only is it one of the highest yielding issuance yet, it has also one of the highest short-term yield rates. Much higher than what the banks that are offering at 1.5%-1.75% for a 24months issuance.

Jul SSB
July edition of the SSB, higher than CPF OA!

As soon as I saw the issuance out on the newspaper, I quickly pointed it to my Dad, whom I know puts his money in fixed bank deposits. With the low minimum deposit amount and the AAA backing of the government, this is a no brainer if you already keep money in FDs.

Without any minimum sum required, I’d reckon that it’ll even beat the DBS multiplier account for most account holders, without a minimum spending amount.

DBS Multiplier Account Interest Rates
Most savers would only receive about 2% – 2.2% p.a 

Knowledge is power and financial literacy and keeping current in the investment world yields long term results.