Singapore Savings Bond

Some foreign banks offer a much better fixed d rate than the savings bond with no early withdrawal penalty.
Insured up to 50K if I am not wrong.The stronger ones are about 99.9% safe. But it's good that the government is offering it, it acts as a catalyst for some banks will try offer something to better it.

Gov't Savings bonds for inflation to belly up the capital.... kinda of a joke

(02-09-2015, 11:14 AM)opmi Wrote: I will buy too.  Probably next year to lock in the higher interest rate then (?)

Does SSB makes 'laddering strategy' redundant? Any thoughts?

If interest rate rises, there might be more people trying to get it next year and hence probability to get a larger allocation reduces. In any sense, these funds are liquid and have a 1month 'receivable turn-over' and so it shouldnt be any too hard to sell what you already have now to buy the new ones, or sell the ones you have after successfully getting the new higher interest one.

I practise a laddering strategy with my spare cash (different maturities for FDs, spaced out every 3-6months). I think laddering strategy is most probably redundant now, since these bonds are highly liquid (For long term investors, i consider one month 'receivable' turnover to be negigible) with NO capital loss.

(03-09-2015, 07:01 AM)weijian Wrote:

(02-09-2015, 11:14 AM)opmi Wrote: I will buy too.  Probably next year to lock in the higher interest rate then (?)

Does SSB makes 'laddering strategy' redundant? Any thoughts?

If interest rate rises, there might be more people trying to get it next year and hence probability to get a larger allocation reduces. In any sense, these funds are liquid and have a 1month 'receivable turn-over' and so it shouldnt be any too hard to sell what you already have now to buy the new ones, or sell the ones you have after successfully getting the new higher interest one.

I practise a laddering strategy with my spare cash (different maturities for FDs, spaced out every 3-6months). I think laddering strategy is most probably redundant now, since these bonds are highly liquid (For long term investors, i consider one month 'receivable' turnover to be negigible) with NO capital loss.

The ceiling of 100K, probably is the limit (as highlighted by some VBs). The laddering strategy with bonds, is still a viable strategy for larger fund.

(02-09-2015, 10:21 PM)Big Toe Wrote: Some foreign banks offer a much better fixed d rate than the savings bond with no early withdrawal penalty.
Insured up to 50K if I am not wrong.The stronger ones are about 99.9% safe.  But it's good that the government is offering it, it acts as a catalyst for some banks will try offer something to better it.

The problem is some of these foreign banks are not so accessible / offer such products to a limited audience. 

The 0 ~ 100 k upper limit means this is targeted at the moderately middle income Singaporeans, being sophisticated enough to open a CDP account and yet want an alternative to equities and traditional FD. It is practically a national savings scheme, IMO. Perhaps a better picture can be constructed by looking at each of the options such as SRS, CPF OA/SA etc.

(03-09-2015, 02:32 PM)LionFlyer Wrote:

(02-09-2015, 10:21 PM)Big Toe Wrote: Some foreign banks offer a much better fixed d rate than the savings bond with no early withdrawal penalty.
Insured up to 50K if I am not wrong.The stronger ones are about 99.9% safe.  But it's good that the government is offering it, it acts as a catalyst for some banks will try offer something to better it.

The problem is some of these foreign banks are not so accessible / offer such products to a limited audience. 

The 0 ~ 100 k upper limit means this is targeted at the moderately middle income Singaporeans, being sophisticated enough to open a CDP account and yet want an alternative to equities and traditional FD. It is practically a national savings scheme, IMO. Perhaps a better picture can be constructed by looking at each of the options such as SRS, CPF OA/SA etc.

Yes you are right. These banks tend to have a smaller deposit base and hence are the most aggressive in offering the highest rates.
Not sure if I can list some of them, one Ang Mo Bank requires a minimum deposit of 150K and one china bank 1.55% for 12mths and 1.83% for 24months, 20K minimum . And the thing about some of the china banks is that they do not advertise(not even on their homepage, you can probably find a tiny poster at some branches).

(03-09-2015, 08:44 AM)CityFarmer Wrote:

(03-09-2015, 07:01 AM)weijian Wrote:

(02-09-2015, 11:14 AM)opmi Wrote: I will buy too.  Probably next year to lock in the higher interest rate then (?)

Does SSB makes 'laddering strategy' redundant? Any thoughts?

If interest rate rises, there might be more people trying to get it next year and hence probability to get a larger allocation reduces. In any sense, these funds are liquid and have a 1month 'receivable turn-over' and so it shouldnt be any too hard to sell what you already have now to buy the new ones, or sell the ones you have after successfully getting the new higher interest one.

I practise a laddering strategy with my spare cash (different maturities for FDs, spaced out every 3-6months). I think laddering strategy is most probably redundant now, since these bonds are highly liquid (For long term investors, i consider one month 'receivable' turnover to be negigible) with NO capital loss.

The ceiling of 100K, probably is the limit (as highlighted by some VBs). The laddering strategy with bonds, is still a viable strategy for larger fund.

My comment wasn't really meant for folks who have loaded bazookas
In any way, bazooka equiped OPMIs most probably are accredited and play a different ball game - They buy gov bonds or perpetuals (quite popular last 3years) at 250k/pop. They shouldnt really be looking at SSB, which many folks have pointed out to be aimed at a different pool of people.

(02-09-2015, 11:14 AM)opmi Wrote:

(01-09-2015, 07:43 PM)newborn1000 Wrote: I think I will buy some for retirement, cant always be stocks =D

I will buy too.  Probably next year to lock in the higher interest rate then (?)

Does SSB makes 'laddering strategy' redundant? Any thoughts?

You can buy some now eg 2.6%

If as and when it becomes 3-4%, you can redeem your 2.6% to buy 3-4%

Not expected to have a great difference, just a suggestion =)

The risk with switching to the next tranche with higher interest is you may not get the full amount you redeemed.

For this first tranche of $1.2bil, this is equivalent to about 2.4mil $500. So if we assume about 300k applicants, then we might be able to get $4k each which isn't alot. To get the full amount, you need to do this 25 times.

First SSB Application Results

19,505 individuals applied for $413,161,000 the first Singapore Savings Bond issue.  All applicants will receive their application amount in full, subject to the limit of $50,000 per individual1 . The Savings Bonds will be deposited into applicants’ Central Depository (CDP) Securities accounts on 1 October 2015.