Singapore Savings Bond

[egghead]

Based on the SSB link provided by CY09,

"Applications and redemption requests must be submitted either through the ATM networks or Internet banking systems of Participating Banks."

Therefore my interpretation is that SSB will not be exchange traded. In fact, it cannot be transferred or pledged.

[Art or Science]

yeah cannot trade. can only redeem.

Not interested in this at the moment. just sharing the info.

Non-transferable

Investors cannot transfer ownership of their Savings Bonds to another person except in specific situations such as following the investor's death. This means that the bonds cannot be bought or sold to someone else or traded on SGX like conventional bonds or shares. Savings Bonds cannot be pledged as collateral.

http://www.sgs.gov.sg/savingsbonds/About...ation.aspx

[Art or Science]

First Singapore Savings Bond to pay average 2.63% if held to 10th year

For those who redeem the SSBs at an earlier date, the average return per year will range from 0.96 per cent at the end of the first year to 2.53 per cent at the end of year nine. Those who hold the bonds for five years will earn an average of 2.01 per cent per annum.

SINGAPORE: The first Singapore Savings Bond (SSB) will be issued on Oct 1, with those holding the bonds for the full 10 years earning an average interest rates per annum of 2.63 per cent, the Monetary Authority of Singapore (MAS) said on Tuesday (1 Sept).
For those who redeem the bonds at an earlier date, the average return per year will range from 0.96 per cent at the end of the first year to 2.53 per cent at the end of year nine. Those who hold the bonds for five years will earn an average of 2.01 per cent per annum.
Applications for the bonds will open from 6pm on Tuesday (Sep 1) till Sep 25, and MAS will announce the allotment results after 3 pm on Sep 28. The bonds will be issued on the first business day of the following month.
MAS said S$1.2 billion worth of SSB will be issued for the month of October. Depending on demand, up to S$4 billion of savings bonds could be issued in 2015.
Application for the SSB should be in multiples of S$500 with a minimum investment of S$500.
MAS says a new savings bond will be issued every month for at least the next five years.
Those who wish to buy the SSB will need to have an Individual Central Depository Securities (CDP) account with Direct Crediting Service activated. Investors who intend to open CDP accounts are advised to do so early, as the account opening process takes at least two weeks.
Application for the savings bond may be done at the ATMs of DBS and POSB, OCBC Bank or United Overseas Bank. In addition, DBS and POSB customers can also apply for the bonds online via internet banking. The CDP account number is needed at the point of application.
The SSB website is accessible at www.sgs.gov.sg/savingsbonds and members of the public can call the Savings Bonds hotline at 6221 3682 to find out more about the programme.

- CNA/av

[newborn1000]

I think I will buy some for retirement, cant always be stocks =D

[NTL]

My view is this Saving Bonds can break the traditional financial practice of keeping 6mths of emergency cash. Since that it can be redeemed on monthly basis, the emergency cash can be reduced to just 2mths, and put the rest into this Saving Bonds.

[opmi]

My view is this Saving Bonds can break the traditional financial practice of keeping 6mths of emergency cash. Since that it can be redeemed on monthly basis, the emergency cash can be reduced to just 2mths, and put the rest into this Saving Bonds.

I think emergency funds are for immediate liquidity during emergencies. I try not to be too clever by trying to sacrifice liquidity for returns.
In life, troubles seems to follow one after another. Better play 'safer'.

[opmi]

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?

[egghead]

One can only buy up to $100,000 SSB. Therefore it is not significant for most VB here.

[koh_52]

To me this SG saving bond is not a good deal. Only 2.63% for 10 years, can’t even beat inflation.


Frankly, if you have 100k and qualified as HNW investor, you might as well put your money in ’DOG’ s fund, my personal view he can deliver for you  5% yield  p.a over  an average of 5 yrs span.

I did parked some in his fund and for me I get out after 3 yrs and the net yield achieved was 5% p.a., imagine during that time I went in with STI index, aro 3,000 pts plus now market dip is a good time to enter, but my money all when to redeem my property loan leow. This investment is also another long term investment before you can get the fruit.

But if you park in SG saving bond using this place as emergency cash holding area should be okay. IMO.

[tanjm]

To me this SG saving bond is not a good deal. Only 2.63% for 10 years, can’t even beat inflation.


Frankly, if you have 100k and qualified as HNW investor, you might as well put your money in ’DOG’ s fund, my personal view he can deliver for you  5% yield  p.a over  an average of 5 yrs span.

I did parked some in his fund and for me I get out after 3 yrs and the net yield achieved was 5% p.a., imagine during that time I went in with STI index, aro 3,000 pts plus now market dip is a good time to enter, but my money all when to redeem my property loan leow. This investment is also another long term investment before you can get the fruit.

But if you park in SG saving bond using this place as emergency cash holding area should be okay. IMO.

You appear to be making the fairly basic mistake of looking at return without considering risk (and just because he delivered you 5% over 5 years, it doesn't mean it is riskless. it certainly doesnt mean it is repeatable). If that's the case, I have 25% yielding investment I'd like to sell you.

Back to SSB.

Given that it is redeemable (callable) with at most a month's notice without any counterparty risk at par, the closest comparable is a 1month fixed deposit. But with a 1month fixed deposit, the bank can theoretically fail, and the bank does not gaurantee your rollover rate.

For a riskless investment, it is a marvelous deal. Hence, the 100K ceiling.

If there's anybody here that is 100% invested in risky investments, I guess this is not for you.