Guide to Investing in Singapore Savings Bond (SSB) – Interest Rates and How to buy
Singapore Savings Bond (SSB) is one of the more common options for Singaporeans to invest their money in as it offers a higher return at times as compared to fixed deposits that the bank offers.
It is one of the easier ways to combat inflation rate at 1.9% with almost no risk involved.
Here’s a quick comparison that can help you with your decision, should you be looking to invest in the SSB:
|Singapore Savings Bond (SSB)||Savings Account in Banks||Fixed Deposits|
|Low Barriers to Invest||YES||YES||NO|
|Returns >1% Per Annum||YES||NO||DEPENDS|
In this article, we guide you through everything you need to know about the Singapore Savings Bond:
- Interest rates of Singapore Savings Bonds (SSB) for the month of January 2019
- What Are The Benefits of Parking My Savings With Singapore Savings Bond (SSB)?
- Step-By-Step Guide To Investing In Your First Singapore Savings Bond (SSB)
- Singapore Savings Bond (SSB) vs Fixed Deposits
Interest rates of SSB for the month of January 2019
The interest rate for Singapore Savings bond changes every month, depending on the bond that one invests in. One can check out the details of the bonds using the Singapore Savings Bonds website.
As for the Singapore Savings Bond for January 2019, here are the details:
|Details of Singapore Savings Bond (SSB) December 2018|
|Issue Date||2 January 2019|
|Maturity Date||1 January 2029|
|Application period||Opens: 6.00pm, 3 Dec 2018
Closes: 9.00pm, 26 Dec 2018
Results: After 3.00pm, 27 Dec 2018
The interest rate for January 2019’s SSB is:
|Year(s) from Issue Date||Interest (%)||Average return per year (%)|
This means that should one invest S$1,000 into this Singapore Savings Bond for the full 10 years, the effective interest rate per year will be 2.45% and one will earn a total interest of S$245.
What is Singapore Savings Bond (SSB)?
Singapore Savings Bonds are issued by the Singapore Government, to provide Singaporeans with a safe and flexible option for long-term saving.
What Are The Benefits Of Parking My Savings With SSB?
Before we jump into investing in the SSB, we take a closer look at the risks involved.
1. No Penalty For Early Redemption
The longer one holds on to bond, he will be rewarded with a higher interest rate. There is, however, no penalty for individuals who wish to get their investment back early.
One can get back his investment (which includes his initial capital and interest rate earned), within one month of his application to redeem early. Hence, if you hate the feeling of having your money locked up somewhere, you will not have the same problem when investing in SSB.
2. Fully Backed By Singapore Government
The amount you invest in the SSB is backed by the Singapore Government.
Whatever your political views might be, the Singapore Government received the strongest “AAA” credit rating, which reduces the risks of investing in the SSB to the minimum. Other countries with the same “AAA” credit rating are countries such as Switzerland and Hong Kong.
This makes the SSB one of the safest product in the market.
3. $500 Is All It Takes
One does not have to starve and scrimp like crazy to make an investment. This is because the minimum amount to invest is at $500, which makes it suitable for almost everyone.
Step-By-Step Guide To Investing In Your First Singapore Savings Bond (SSB)
Here’s how you go about applying for the Singapore Savings Bond.
1. What You Need?
Before applying, make sure you have two things:
- A bank account with any local banks in Singapore
(DBS/POSB, OCBC or UOB)
- A CDP securities account that is linked to the bank account you intend to invest with.
2. How To Invest In Singapore Savings Bond
One can apply for the Singapore Savings Bond either through two methods:
- Apply at an ATM near you.
The ATM must be that of DBS/POSB, OCBC and UOB.
- Apply through Internet Banking under Singapore Government Securities. If you are using OCBC, the OCBC mobile application works too!
Remember to have your CDP account number with you when applying. Take note that a minimum investment of $500 is required, and if you wish to invest more, increase in multiple of $500. Each application is capped at $50,000. There will be a $2 transaction fee involved for each application.
What To Do After Application?
Once you have applied, sit back and relax. The results will be announced after the ” last day to apply date”.
One can take note of the important dates here.
Do note that, if there is an event of over-subscription, meaning more demand than the amount available, one may only find himself investing a portion of the amount he requested for.
The rest of the amount will be returned back to his account.
Other Important Dates
The successful allocated Savings Bonds will be issued on the first business day of the following month.
Expect your first interest 6 months after the bonds are issued. Interests are payable every 6 months. All these will be reflected on your statement, and interests are automatically credited to your bank account.
To conclude, we did a quick search on some of the highest fixed deposits plan offered by the banks, the highest interest rate we came across is about 1.40% per annum.
Most of these fixed deposits plan require parking a huge amount of money, usually more than $10,000. On top of that, investors are required to lock in their savings for an amount of time.
Hence, SSB is definitely a better investment when compared to fixed deposits given the higher interest, higher flexibility and low barriers to invest.
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