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 bank fixed deposits.
It is one of the easier ways to combat the prevailing inflation rate (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|
- Updated SSB interest rates
- What Are The Benefits of Parking My Savings With SSB?
- Step-By-Step Guide To Investing In Your First SSB
- SSB vs Fixed Deposits
SSB Interest Rates for May 2019
The interest rate for Singapore Savings bond changes every month, depending on the bond that one invests in. If you’d like to find out more details of the bonds, check out the Singapore Savings Bonds website.
Note: SRS applications for Savings Bonds open from this month. With individual limits doubling to $200,000.
Here are the details for Singapore Savings Bond May 2019:
|SSB May 2019 Details|
|Issue Date||2 May 2019|
|Maturity Date||1 May 2029|
|Application period||Opens: 6.00pm, 1 Apr 2019
Closes: 9.00pm, 25 Apr 2019
Results: After 3.00pm, 26 Apr 2019
The interest rate for May 2019’s SSB is:
|Year(s) from Issue Date||Interest (%)||Average return per year (%)|
This means that if you invest $1,000 into this Singapore Savings Bond for the full 10 years, the effective interest rate per year will be 2.16% and you’ll earn a total interest of $217.
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, let’s take a closer look at the risks and benefits.
1. No Penalty For Early Redemption
The longer you hold on to the bond, the higher the interest rate you enjoy.
There is also no penalty for individuals who wish to exit their investment early.
Once you submit your redemption request, you will get your principal back (along with any accrued interest) by the 2nd business day of the following month.
What does mean?
- Assuming you choose to redeem $1,000 in Apr 2019
- You will receive $1,000 and any accrued interest by the end of the 2nd business day in May 2019
So if you hate the feeling of having your money locked up for extended periods of time, the SSB is the perfect solution.
2. Fully Backed By Singapore Government
The amount you invest in the SSB is completely backed by the Singapore Government.
Whatever your political views might be, it IS a fact that the Singapore Government received a “AAA” credit rating. This reduces the risks of investing in the SSB to the bare minimum.
Other countries with the same “AAA” credit rating are countries such as Switzerland and Hong Kong.
Having such a strong rating makes the SSB one of the safest products out in the market.
3. $500 Is All It Takes
You don’t need to starve or scrimp like crazy in order to invest in the SSB.
The minimum amount to invest is $500, which makes it suitable for almost everybody.
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
You can apply for the Singapore Savings Bond through two methods:
- Apply at an ATM (must be that of DBS/POSB, OCBC, or UOB) near you, OR
- 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”.
You can find out important dates like the “last day to apply date” here.
Do note that, if there is an event of over-subscription, meaning more demand than the amount available, you might find yourself only investing a portion of the amount you requested for.
The rest of the amount will be returned back to your bank account.
Other Important Dates
The successful allocated Savings Bonds will be issued on the first business day of the following month.
You can expect your first interest 6 months after the bonds are issued.
Interests are payable every 6 months. All these will be reflected in 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.
Have questions about investing in Singapore Savings Bonds (SSB)? See what people are asking on the Seedly QnA platform: