Guide to Investing in Singapore Savings Bond (SSB) – Interest Rates and How to buy

Financial Bloggers and how they will invest their first S$10,000

Not so long ago, we asked 4 financial bloggers on how they will suggest our readers on spending their first $10k.

The suggestions include the Straits Times Index, Blue-chip stocks and also Singapore Savings Bonds (SSBs).

Here’s a quick comparison that can help you with your decision, should you be looking to invest in the SSB.

Singapore Savings Bonds vs Banks vs fixed deposits

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 October 2018

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 October 2018, here are the details:

Details of Singapore Savings Bond (SSB) October 2018
Issue Date1 October 2018
Maturity Date1 October 2028
Application periodOpens: 6.00pm, 3 September 2018
Closes: 9.00pm, 25 Sep 2018
Results: After 3.00pm, 26 Sep 2018

The interest rate for the October 2018 SSB is:

Year from date issuedInterest (%)Average return per year (%)
1 Year1.741.74
2 Years2.08

3 Years2.222.01
4 Years2.312.08
5 Years2.422.15
6 Years2.552.21
7 Years2.632.27
8 Years2.722.32
9 Years2.832.37
10 Years2.972.42

Interest rates and return of SSB for September 2018

This means that should one invest S$1,000 into this Singapore Savings Bond, the effective interest rate per year will be 2.42% and one will earn a total interest of S$245 if held until maturity.

Singapore Savings Bond (SSB), what is it?

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 into the SSB, we take a closer look at the risks involved.

Zero 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.

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.

$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.

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.

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.

Apply Already Then What?

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.

Singapore Savings Bond (SSB) vs Fixed Deposits

When Should You Choose Fixed Deposits over Singapore Savings Bonds?

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.

Read also: Here Are Some Hacks You Need To Know For Singapore Savings Bonds (SSB)

Hence, SSB is definitely a better investment when compared to fixed deposits given the higher interest, higher flexibility and low barriers to invest.

If you would like to hear what your peers have experienced in the Singapore Savings Bond, we have an open community for you to hear from different perspectives. Check out our blog for more unbiased opinions on your personal finance journey.

Share with us if you have any experience with these or even a better alternative by commenting below! Also, don’t forget to share it with your friends who might need this!