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and so?
You go from a very high risk free rate to a "merely" high risk free rate. And on top of that it floats (resets every 6 months I believe). You still would be unlikely be able to get a better riskfree investment outside CPF SA. It is possible you might be able to buy a 30Y SGS with a higher yield at spot, but the coupon rate on your SGS bond would be fixed and would not float and is therefore subject to interest rate risk.
Normally, floating rate deposits/loans are based on a resettable 3M or 6M interbank rate. This one is based on a 10Y bond yield plus 1%.
You go from a very high risk free rate to a "merely" high risk free rate. And on top of that it floats (resets every 6 months I believe). You still would be unlikely be able to get a better riskfree investment outside CPF SA. It is possible you might be able to buy a 30Y SGS with a higher yield at spot, but the coupon rate on your SGS bond would be fixed and would not float and is therefore subject to interest rate risk.
Normally, floating rate deposits/loans are based on a resettable 3M or 6M interbank rate. This one is based on a 10Y bond yield plus 1%.