Singapore Savings Bond (SSB) Review 2024—What are the Interest Rates and How to Buy

Ever since its inception in 2015, the Singapore Savings Bonds (SSB), launched by the Government, has transformed from a conservative investment option with low returns to a worthwhile investment vehicle offering notable returns with minimal risk. 

As of April 2024, the SSBs continue to generate interest due to their steady and attractive interest rates. In the most recent release, the Singapore Savings Bonds’ offer of 3.06% is even higher than last year’s average 10-year return of 3%, which was the highest ever recorded.

However, despite the excitement, it’s essential to understand the current interest rates of the Singapore Savings Bonds and their operation before deciding on their true value as an investment.

 

Singapore Savings Bond (SSB) Review 2024

1. 1. 1. Singapore Savings Bond interest rates (April 2024)
      2. Singapore Savings Bond calculator
      3. Can I still buy the latest release Singapore Savings Bonds?
      4. What are Singapore Savings Bonds or SSB?
      5. How to buy Singapore Savings Bonds
      6. How to sell (redeem) Singapore Savings Bonds
      7. Are Singapore Savings Bonds worth buying now?
      8. What are the alternatives to Singapore Savings Bonds?
      9. A final note on Singapore government bonds (or SGS bonds)

1. Singapore Savings Bond interest rates (April 2024)

Let’s cut to the chase — you probably want to know what sort of returns you’re looking at if you buy an SSB. This is easy to get hold of. Just check the official website for published SSB interest rates. New bonds are issued every month, and the interest rates vary.

Tenure (year)	Average Interest Per Year (%)	Average Return Per Year (%)
1	2.99%	2.99%
2	2.99%	2.99%
3	2.99%	2.99%
4	2.99%	2.99%
5	2.99%	2.99%
6	2.99%	2.99%
7	3.03%	3.00%
8	3.20%	3.02%
9	3.27%	3.04%
10	3.27%	3.06%

With the recent release of the SSB (SBMAY24 GX24050X), here’s an example of the potential interest from a $10,000 investment:

10 years can seem like a long period to have your money stashed away. Contrary to what most people might believe, you don’t have to commit to the entire 10-year-long tenure. If you decide to withdraw earlier, you will be able to do so with no penalty. You will only incur a $2 transaction fee.

 

2. Singapore Savings Bond calculator

Let’s recalculate the returns based on the new interest rates. If you withdraw after Year 1, your actual returns from an entire investment of $10,000 averages out to 2.99% per year which comes up to $299.

If you hold out for the full 10 years, with the final year interest rate being 3.27%, you will earn a cumulative sum that’s higher than the previous scenario.

Here’s the recalculated table of how much interest you will earn at the end of every year:

Tenure (year)	Average Interest Per Year	Cumulative Interest on $10,000 Principal
1	2.99%	$299
2	2.99%	$598
3	2.99%	$897
4	2.99%	$1,196
5	2.99%	$1,495
6	2.99%	$1,794
7	3.03%	$2,103
8	3.20%	$2,424
9	3.27%	$2,755
10	3.27%	$3,086

 

3. Can I Still Buy The Latest Release Singapore Savings Bonds?

If you’re considering investing in Singapore Savings Bonds, here’s a detailed breakdown of the key parameters for the GX24050X issue:

Code	GX24050X
Naming Format	SBMAY24 GX24050X (CDP statement),  CDP-SBMAY24 (bank statement),  GX24050X (SRS statement)
Duration	10 years
One-Year Yield	2.99%
Ten-Year Average Yield	3.06%
Start Date	1st April 2024, 6pm
End Date	25th April 2024, 9pm
Allocation Date	26th April 2024, post 3pm
Distribution Date	2nd May 2024, by end of day
Interest Pay Dates	Upcoming: 01 Nov 2024. Following payments: biannually on 1st May and 1st Nov until maturity
Investment Quantities	Minimum $500, in increments of $500. Max holding limit is $200,000

Before you get carried away by the attractive interest rates, let’s backtrack a little to the basics.

 

4. What are Singapore Savings Bonds or SSB?

Obviously, Singapore Savings Bonds are a type of “bond”. When you buy a bond, you’re really lending money to whoever issued it. The issuer can be a private company, but in the case of SSB, it’s the Singapore government.

(In other words, if you buy a SSB, you revoke your right to complain about the greedy Gahmen always taking Singaporeans’ hard-earned cash.)

So, why is everyone clamouring to lend the government money?

Because Singapore Savings Bonds gives you good returns with virtually zero risk. SSBs are arguably safer than putting your money in a savings account, because banks can close down, but the track record by the Singapore government is unwavering.

In return for your generosity in loaning them your hard-earned money, the Government will pay you interest every 6 months, like clockwork.

Finally, SSBs also let you choose how long you want to invest, without any lock-in period. The longer you keep the money in the bond (up to a maximum of 10 years) the higher your returns, but if you choose to liquidate it early there’s no penalty at all.

5. How to buy Singapore Savings Bonds

Before you buy, there are a few important things you need to know about Singapore Savings Bonds…

Factor	What you need to know
Eligibility	Anyone aged 18 and above can buy SSBs
Minimum amount	$500. SSBs are sold in multiples of $500
Maximum amount	$200,000 per individual, can be across multiple SSBs.
Transaction fee	$2 per transaction, each time you buy or sell a bond
Interest payments	Every 6 months. Note that you won’t earn interest on your interest (no compound interest), because interest is paid out.
Risk factor	As low as it gets – the government has an “AAA” credit rating. Principal is guaranteed.
Ownership	SSBs cannot be bought or sold like shares. You cannot transfer ownership of SSBs to another person.
Taxation	SSBs are exempt from tax

Now that’s out of the way, here’s a simple 3-step guide to buying your first Singapore Savings Bond.

Step 1: Get a DBS/OCBC/UOB bank account + CDP Securities account

Most Singaporeans already have a bank account with one of these 3 local banks. If you do, go ahead and open an individual CDP account by following the steps on the website. You’ll have to print out an application form and mail it with supporting documents.

Step 2: Apply for Singapore Savings Bond

A new bond is released at the start of every month; see here for this month’s Singapore Savings Bond. There’s usually an application period of about 3 weeks.

You can apply for your SSB through iBanking or ATMs during the period. Have your CDP account number handy for that. You’ll need to specify the amount you want to invest, but no need to commit to a tenure.

The amount you want to invest + $2 processing fee will be deducted from your bank account when you apply.

Step 3: Secure your Singapore Savings Bond

After the application period closes, you have to wait till the end of the month to find out if you have secured the bond. If that month is oversubscribed and you can’t get the amount you want, the excess will be refunded within the next day.

Bonds are officially issued by the 1st business day of the following month. You’ll be officially notified by CDP by post. After which, you can start receiving interest payments every 6 months.

 

6. How to sell (redeem) Singapore Savings Bonds

You can sell (technically, “redeem”) your SSB any month before your full 10 years are up, with no penalty. Here’s what happens at each stage:

When you redeem	What to do	What you’ll receive
Early redemption (when there’s a scheduled interest payment)	Submit redemption request + pay $2 transaction fee	Principal amount + full interest
Early redemption (in between scheduled interest payments)	Submit redemption request + pay $2 transaction fee	Principal amount + pro-rated interest
Full term (after 10 years)	Nothing. No need to pay $2 transaction fee	Principal amount + final interest payment

For early redemptions, submit your request through DBS, OCBC or UOB ATMs or iBanking. You can redeem the bond partially, in multiples of $500, and you can redeem more than one bond each time. Note that there is a $2 transaction fee for every redemption request.

There’s a “one month notice” when you redeem your SSB. The amount you’re owed will be auto-credited into your bank account only the next month, so don’t wait till the very last minute to redeem your SSB!

 

7. Are Singapore Savings Bonds worth buying now?

With emerging investment forms such as cryptocurrency, peer-to-peer lending, real estate crowdfunding, and robo-advisors, Singapore Savings Bonds (SSBs) retain their position as a reliable low-risk investment alternative. Comparable to fixed deposits or savings accounts, SSBs may not offer rapid, high yields, but they assure a secure environment for investment.

Currently, SSBs offer an attractive option for those seeking low-risk investments. Whether you are looking to balance your portfolio with lower-risk investments or just want a safe place to store your money for a few years, SSBs remain a viable option.

Interest rates for SSBs have seen highs and lows since their inception in 2015. In recent years, there has been a decline in SSB interest rates. However, they are showing signs of recovery. For example, the Singapore Savings Bonds for August 2023 previously offered an attractive 3.0% p.a and now 3.6% p.a for April 2024.

Low or zero-risk alternatives, such as savings accounts and fixed deposits, often fail to match the higher interest rates offered by Singapore Savings Bonds (SSBs). Banks like Standard Chartered, OCBC, or Maybank can indeed offer higher interest rates, making them tempting for investment. However, they often come with more stringent requirements:

• Maintain a high minimum balance, which could be challenging for some investors.
• Limit the number of transactions you can perform, restricting your access to your funds.

Therefore, while higher returns might be appealing, SSBs present a simpler investment option. To reap the full benefits of SSBs, you might need to leave your money there for a full decade. Like any investment, it’s crucial to consider your financial goals, risk tolerance, and investment timeline before deciding.

 

8. What are the alternatives to Singapore Savings Bonds?

Picture this: You’ve saved up $10,000 and you’re looking for somewhere to park it for a couple of years. It’s part of your wedding/moving house/new car fund, so you don’t want that cash anywhere volatile.

Apart from a Singapore Savings Bond, you can also place it in a fixed deposit account and get a promotional rate for a shorter 24-month tenure.

Alternatively, you can open a high-interest savings account that provides bonus interest. However, you’re more likely to be subjected to monthly activities like GIRO salary credit, credit card spending, investment policies, etc. to enjoy the upper limits of the interest rates of up to 7.88%.

Here’s what your returns will look like after a year:

Type of investment	Interest rate per year (%)	Total interest ($)
Singapore Savings Bond	2,99 – 3,27	299 – 327
High interest savings account	1 – 7,88	100 – 788
Fixed deposit account	2,9 – 3,5	$290 – 350

As you can see, the current Singapore Savings Bonds yield a better return compared to savings accounts, with an annual interest rate of 2.99% – 3.27% yielding $299 – $327. On the other hand, fixed deposit accounts offer a higher rate of 2.9% – 3.5%, but require a minimum deposit of $20,000, yielding $290 – $350. 

If your fund is less than $20,000 or $10,000, you might not qualify for most fixed deposits and therefore should consider the SSB, which can be purchased with as little as $500. This makes SSB a convenient entry point into investing.

Of course, there are also limitations to SSBs. No one’s saying you should dump your lifelong savings in there. SSB returns are considered low compared to investments like dividend stocks or even CPF interest rates (4,05% on your Special Account!).

Note also that each person can only put a maximum of $200,000 in SSBs, so after that ceiling, you have to find some other vehicle for your money.

 

9. A final note on Singapore government bonds (or SGS bonds)

If you’ve maxed out on Singapore Savings Bonds (SSBs), consider other Government-related investment options with the same “AAA” rating. These options, though more complex and requiring more investment knowledge, are a means of lending money to the Government.

• Singapore Government Securities (SGS) Bonds offer scheduled interest payouts every 6 months, with tenures of up to 30 years. You can also sell the bond for a capital gain.
• Treasury Bills (T-Bills) are short-term investments sold at a discount and bought back at full price upon maturity, the return being the price difference.

For more info, head to the MAS website to see what SGS bonds or T-Bills are on offer.

Have you ever invested in Singapore Savings Bonds? Share your tips and experiences in the comments!