Interest rates going up for Singapore Savings Bonds

The latest Singapore Savings Bonds (SSB) application is now open.

When comparing the latest SSB (February 2017 issuance date) with January 2017 SSB, interest rates are higher.

When you hold the bonds to maturity in 10 years time, the annual interest rates paid to you are shown in the table below.

Issuance date Average annual rate of return (p.a) % if held to 10 years
October 2015 2.63
November 2015 2.78
December 2015 2.44
January 2016 2.58
…. ….
December 2016 1.87
January 2017 2.18
February 2017 2.44

When SSB was introduced for the first time, the interest rates were attractive (2.63%, 2.78%, etc). Then it sort of fell off with interest rates going below 2.00% in later issues. The interest rate for December 2016 tranche was just 1.87%.

It then went up in the January 2017 tranche at 2.18%. The latest was better at 2.44%. MAS must have taken into consideration the impact of interest rates increasing in the future with US hiking interest rates.

Now SSB is beginning to look attractive again. The jump in interest rates from December 2016 to now is 0.57 percentage point difference.

Copyright © 2017, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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