As the cash that is sitting in the warchest are waiting to be deployed, placing them into the SSB allows me to get a higher interest than from the bank. Also, I take the SSB as a form of mini-diversification as well as an avenue to temporarily park my money before the funds here are being deployed.
In a brief summary, the SSB is suitable for you IF:
1. You have limited funds/insufficient funds for a FD.
2. Require flexibility in your funds
3. Looking for a safe place to park your money where you will have no capital loss
Hence, considering the factors, the SSB fits quite well into my criteria (especially point 1). Yes indeed, there are bank accounts that are offering really attractive interest like the UOB One, OCBC 360, CIMB FastSaver and even to the latest DBS Multiplier Account etc. However, these accounts comes with certain conditions to fulfill and unfortunately as a student, I'm not able to fulfill the most basic criteria, which is to have salary credited into that account. Thus explaining more onto why I'm looking to the SSB.
In time soon, when I'm conscripted, I would have another option available - POSB SAYE Account which is offering up to 2.25% interest. The POSB SAYE account is an account that catered towards the males which are serving the National Service. With your NS allowance credited into your savings account that is linked to POSB SAYE, and contributing to this POSB SAYE account, you will be eligible to the 2.25% interest. Nonetheless, as time are nearing, I will be writing more about this account.
Back to the SSB account, the interest offered is different every month. You may wish to refer to this website (link), to check out on their latest bond and the interest.
Here's the latest interest rate (for this month's bond: GX18020A)
You may also wish to refer to this link to find the historical rates for SSB here.
1.55% interest for the first year is indeed pretty attractive, tho any investment will probably be able to beat them in terms of dividend yield. However, the true shiny point is the risk-free and liquidity you can receive from them.
Hence, for now, with the above mentioned point, I've applied for the latest bond. I will also be writing more about it upon the result release.
Should you wish to hold longer, you will be able to receive a higher interest payment along the year with up to 2.75% upon maturity at the 10th year.
Here are some important dates for this bond for anyone who's interested to consider:
Issue Date: 1 Feb 2018
Maturity Date: 1 Feb 2028
Interest Payment: 1st interest payment date on 1 Aug 2018 and subsequently every 6 months on 1 Feb and 1 Aug every year.
Opens: 6:00 pm, 2 Jan 2018
Closes: 9:00pm, 26 Jan 2018
Results: After 3:00pm, 29 Jan 2018
|Image from SSB's site: www.sgs.gov.sg|
What is Singapore Saving Bonds?
Singapore Saving Bond (SSB) is a saving bond that is backed by the Singapore Government. The insurer here you're looking at is the Singapore Government, whom received the strongest credit rating of 'AAA' from the international credit agencies.
The minimum amount for the SSB starts at S$500.00 with a ceiling of S$50,000 per bond (Investment sum in multiple of S$500.00). You're also subjected to the maximum individual holding of SSB at S$100,000.
You'll be eligible to invest in the SSB so long you're 18 year old and above.
The really shiny point and thing that I like about SSB is the ability to get back your capital fully without capital losses along with the relatively small amount that you can put in, rather than the usual fixed deposit where you will need amount like S$20,000 and such. Aside this, you'd also be able to retrieve your capital at any month with no penalties.
Interest for the SSB will be paid every 6 months. At the start of each month, there will be a new saving bond issued each month. The maturity for which your SSB is up to 10 year.
Right before buying the SSB, do ensure that you have a couple of things with you.
- A bank account with POSB/DBS, OCBC or UOB.
- Individual CDP Account linked to any of your bank account through Direct Crediting Service (DCS)
So how can you start buying the SSB?
Apply through ATM/iBanking. Be sure to have your CDP account number with you when you're applying and there will be a transaction fee of S$2. Money will be directly deducted from your bank account upon buying the SSB.
The portal for application will open on 6pm from the 1st business day to 9pm on the 4th business day of each month and you might wish to refer to the calendar (here) for the dates.
Upon successful application, your SSB will be deposited into your CDP account and there will be a mail from CDP to inform you of successful allotment.
For more information, please visit SSB's website here.