Not breaking bad. SSB is good, so it is more like breaking good #UncleJoke
Part 1: Understanding Singapore Savings Bonds (SSB)
For the Investor
What They Are: Singapore Savings Bonds (SSBs) are monthly-issued, low-risk investment options by the Singapore government, first introduced in 2015. These bonds have a 10-year term with escalating interest rates to reward long-term investors.
Investment Flexibility: You can start with as little as $500 and go up to $200,000. Plus, you can cash out anytime in multiples of $500 without major penalties – just a $2 fee.
Interest Payments: SSBs pay interest every six months, tax-free, with rates stepping up annually. Currently, they offer around 3.32% average over 10 years, reflecting the current interest rate environment.
Part 2: Why Choose SSBs? And What’s the Catch?
Balancing Pros and Cons
Virtually Risk-Free: Backed by Singapore’s government, these bonds are super safe, meaning you won’t lose your initial investment.
Liquidity Plus: You can access your money whenever you need it, with minimal fees, making SSBs great for emergency funds or short-term savings.
Diversify with Ease: SSBs are a smart addition if your portfolio is heavy on stocks or corporate bonds.
Cons to Consider: While safer, SSBs offer lower returns compared to some other investments. Higher returns come later in the 10-year term, and monthly issues mean interest rates can vary.
Part 3: Getting Started with SSBs
Investing & Redeeming Made Simple
Prep Work: Have a local bank account and a Central Depository (CDP) account linked to it.
Application Process: Apply through ATMs or online banking between specific dates each month. Remember, there’s a $2 application fee.
Allocation & Interest: Check allocation on the 3rd last business day of the month. Enjoy semi-annual interest payments directly to your bank account.
Redeeming Bonds: Redeem anytime in $500 multiples via internet banking. You’ll get your investment and accrued interest by the 2nd business day of the following month.