A Complete Guide to Singapore Savings Bonds (SSB)

Government-backed securities are a popular option in Singapore because they are seen as a relatively low-risk and reliable way to grow your money. The Singapore Savings Bonds (SSB) is one of these options, and is a great choice for those who are new to investing or looking for a secure place to put their money. 

Want to know if SSBs are the right investment for you? You’ve come to the right place. In this guide, we’ll cover how the SSB works, interest rates, and how to determine if it has a place in your investment portfolio.

What Are Singapore Savings Bonds (SSB)?

SSBs are a special type of government saving bonds designed with the individual investor in mind. Their defining features include:

Safe: Fully backed and guaranteed by the Singapore government, meaning you can always get your investment amount back in full with no capital loss.

Long-term: SSB allows you to invest for up to 10 years with interest that increases over time, offering higher returns if you keep your money in the bonds for longer.

Flexible: SSB is flexible, meaning you can exit your investment at any time without losing out on any of the interest you’ve earned so far.

How SSB Works

Before you start investing in Singapore Savings Bonds, or any financial instrument, it is prudent to know how it works. There are two key features all investors need to be aware of when it comes to SSBs:

Issuance Schedule: SSBs are made available to the public regularly, with new bonds issued every month. Each Savings Bond has a tenor of 10 years. 

Step-Up Interest Rates: The Singapore Savings Bond features a step-up interest rate that increases the longer you hold onto the bond. These are intended to be incentives for long-term holding.

Allotment: When applying for SSBs, investors indicate how much they wish to invest. In cases of oversubscription, where applications exceed the bonds available, the SSB allotment system is activated. This system allocates bonds in multiples of $500 to each applicant, continuing until either the investor receives the full amount they applied for or until the entire issuance is allocated, whichever occurs first. This process ensures fair distribution among all applicants.

Looking at the Dec 2024 issuance and allotment of SSBs, we can get a better idea of how it works.

Application Timeline

Opening date: 02 Dec 2024, 6pm

Closing date: 26 Dec 2024, 9pm

Allotment: 27 Dec 2024 after 3pm

Issuance: 02 Jan 2025 by end of day

Issue Code: GX25010E

Tenor: 10 years

Average 10-year p.a. returns: 2.86%

1-year return: 2.73%

Total Amount Offered: S$600.0 million

Issue Date: 02 Dec 2024

Maturity Date: 01 Dec 2034

Interest Payment Dates: Upcoming payment: 01 Jul 2025; Subsequent payments (until maturity): Every 6 months on 01 Jan and 01 Jul

The interest rates for SSBs issued in Dec 2024 are as follows:

The interest rates for SSBs issued can vary from month to month, so it is always important to check before you purchase.

Benefits of Investing in SSB

SSBs have many benefits that make them a versatile option for investors with different goals. Here’s why many consider it one of the best investments in Singapore: 

Highly Secure: When you invest in SSBs, your principal and interest payments are fully backed by the Singapore government. Additionally, the SSB has also received the strongest “AAA” credit rating from international credit rating agencies.

Starting Small: You can start investing in SSBs for as low as S$500, making them one of the most accessible forms of investments available.

Maintain the Value of Your Savings: For retirees or those nearing retirement, the SSB is an excellent way to preserve the value of your nest egg against inflation in your golden years. 

Liquidity and Flexibility: The ability to redeem your bonds in any month without a penalty offers unmatched liquidity and flexibility. This makes SSB an ideal investment to earn interest while still having a rainy day fund.

Diversified Investments: SSBs can be part of a diversified financial portfolio, balancing riskier investments with a stable, government-backed option for a well-rounded investment strategy.

Competitive Yields: SSBs offer competitive returns over time, with similar or higher returns compared to other lower-risk investments, such as fixed deposit accounts.

Safe Investing with Simple™ Cash

While there are many benefits to investing in SSBs, the potential downsides are:

• SSBs can only be bought during the issuance period
• Funds can only be redeemed during the 1st to 4th business day of each month.
• Potentially lower interest rate than what you desire compared to other investments
• Investment amount capped at $200,000 

For those seeking a more flexible investment option with potentially higher returns, StashAway’s Simple™ Cash provides a powerful alternative, offering three distinct products: Simple™ Guaranteed, Simple™, and Simple™ Plus. These products allow investors to access their funds more freely while still earning competitive interest rates.

Key Features of StashAway Simple™ Guaranteed:

• Guaranteed Returns: Enjoy guaranteed interest rates of up to 3% p.a, providing a clear, predictable return on your investment.
• Flexible Lock-in Periods: Choose from 1, 3, 6 or 12 months to suit your financial planning needs.
• No Minimum or Maximum Amount: Whether you’re starting small or looking to invest a larger sum, there are no restrictions on your investment amount.
• Fast Setup: The entire process is streamlined and can be completed in seconds with no paperwork.
• No Fees: Invest with the assurance that no hidden fees will eat into your returns, ensuring the rate you see is the rate you get. 
• App-based Management: Manage your portfolio via the StashAway app, allowing for easy access and control over your investment at any time and from anywhere.

StashAway's Simple™ Guaranteed offers a notable alternative to SSBs, allowing investments at any time without waiting for specific issuance periods. With guaranteed returns of up to 3% p.a. and no investment cap, it provides flexibility and potentially higher returns.

StashAway Simple™ and Simple™ Plus: Expanding Your Options

In addition to Simple Guaranteed, StashAway offers StashAway Simple™ and StashAway Simple™ Plus, giving investors more choices to match their financial goals.

StashAway Simple™ offers a projected yield of 3.40% p.a. at ultra-low risk, with no minimum or maximum investment amounts. It provides complete liquidity, allowing you to withdraw or transfer your funds anytime, with no lock-ins or caps on earnings. This makes it a solid choice for those seeking competitive returns while keeping their cash accessible.

For those aiming for even higher returns, StashAway Simple™ Plus delivers a 3.8% p.a. Yield to Maturity (YTM) with the same flexibility—no lock-ins, no earnings caps, and full liquidity. It’s an ideal choice for investors who want to maximize their returns without compromising easy access to their funds.

Differences Between SSB and Other Fixed-Income Investments

How does the SSB compare to other fixed-income investments like bank fixed deposits, treasury bills, or Singapore Government Securities (SGS) bonds? Let’s take a closer look:

Eligibility to Buy SSBs

Investing in SSB is straightforward. Any individual investor 18 years or older who is able to open a Central Depository (CDP) account or Supplementary Retirement Scheme (SRS) account can purchase Savings Bonds.

How to Buy and Redeem SSBs

Once you meet the eligibility requirements, you can purchase Singapore Savings Bonds through various banking channels. 

How to Buy SSBs

• With cash: Use DBS/POSB, OCBC or UOB ATMs, or internet banking
• With SRS: Use the internet banking portal of your SRS operator 

When are SSBs Issued?

SSBs are issued every month. The Monetary Authority of Singapore (MAS) publishes a calendar with all future issue dates.

When Can I Apply to Purchase SSBs?

The application period to purchase SSBs once they are issued is as follows:

• Opens at 6 pm on the 1st business day of the month
• Closes at 9 pm on the 4th last business day of the month

How Much Can I Invest?

The minimum investment amount for the Singapore Savings Bond is S$500, with additional increments in multiples of S$500. The maximum limit for an individual investor is S$200,000.

How Can I Redeem My SSBs?

Redemption of SSBs is defined as returning your Savings Bond to the government before it matures in exchange for your initial investment and accrued interest. To redeem your SSBs, follow these steps:

• For cash investments: Submit your redemption request through a DBS/POSB, OCBC, or UOB ATM, or via your bank’s internet banking portal
• For SRS investments: Submit your redemption request via the internet banking portal of your SRS operator

How Much Can I Redeem?

Just like the minimum investment amount, the minimum redemption amount for each Savings Bond is S$500, with increments in multiples of S$500.

Are There Any Fees Associated with Buying SSBs?

Your bank will charge a S$2 transaction fee for each application, and a S$2 transaction fee for each redemption.

Understanding SSB Interest Rates

The Singapore Savings Bonds interest rates are anchored to the yields of Singapore Government Securities (SGS). Specifically, the rates are based on the average of the daily SGS benchmark yields for one, two, five, and ten-year terms from the preceding month. This method ensures that the coupon rates for each SSB issuance are aligned with the yields of SGS with corresponding maturities.

For instance, the average annual compounded return that an investor earns from holding an SSB for a specific period, such as five years, is closely linked to the yield of a five-year SGS bond.

Finally, SSB rates offer a return that increases the longer you hold them for. This “step up” feature of the SSB reflects the objective of the Savings Bond programme, which is to facilitate long-term savings and investment.

When is the SSB interest paid?

Interest on SSBs is paid out every six months post-purchase of the bond, directly credited into the bondholder’s bank account. These payments are made on the 1st business day of the month.

For cash purchases, interest is credited to the bank account linked to the investor's individual CDP Securities account. For SRS investments, it goes directly to the SRS account.

SSB Historical Rates

The historical interest rates for SSBs since the start of 2023 are as follows:

Visit the SSB statistics section of the MAS website to view SSB interest rates for a specific month or year.

Risks and Considerations of SSBs

SSBs are an appealing low-risk investment choice, thanks to their fixed interest rates and resilience against market fluctuations. The flexibility to redeem these bonds at any time without incurring penalties further enhances their attractiveness.

Despite these advantages, it's important for investors to consider the risk of inflation, which can diminish the real value of the returns over time. To mitigate this, consider incorporating SSBs into a wider, diversified investment strategy.

By complementing SSBs with other investment vehicles that potentially yield higher returns, investors can better safeguard their financial portfolio against inflationary pressures rather than relying solely on SSBs for financial growth.

Using SSBs in Financial Planning

SSBs are a predictable and stable investment choice, making them a reliable component of a diversified investment portfolio. Their predictability is especially beneficial for those seeking a stable income stream alongside more volatile investments, helping to balance overall portfolio risk and support both immediate and long-term financial goals such as:

Retirement Planning: SSBs are ideal for generating consistent, reliable returns to keep your nest egg above inflation during retirement, ensuring your money doesn’t lose value over time.

Education Funding: Allocating part of a portfolio to SSBs can be useful for building towards a long-term goal that is many years out, such as a dedicated education fund for your child. This way, you’ll make full use of the Saving Bonds' step-up interest to maximise returns over time.

Emergency Savings: Allocating your emergency funds to SSBs can be useful to protect and grow your capital without losing value to inflation. With the ability to withdraw your funds at any time during the start of the month, it is a relatively liquid option for most people. 

Are SSBs Right for You?

Singapore Savings Bonds offer a unique combination of low-risk, relative liquidity, and step-up interest rates, making them a compelling choice as part of a balanced investment strategy. 

Investing in SSBs alongside cash management portfolios like StashAway Simple allows investors to strike a balance between securing guaranteed returns and pursuing higher, slightly more volatile returns through market investments. This strategy allows for a diversified approach to achieving your financial goals, blending stability with growth potential.