Returns on Singapore Savings Bonds hit record high
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The November issue of Singapore Savings Bonds (SSB) opened on Monday with a first-year interest rate of 3.08 per cent and a 10-year average return of 3.21 per cent, both at record highs, according to data from the Monetary Authority of Singapore (MAS).
In comparison, October's SSB issue offered a first-year interest rate of just 2.6 per cent and a 10-year average return of 2.75 per cent, MAS data showed.
The previous record for the 10-year average return was in August when it hit 3 per cent. That saw applications reach $2.4 billion for the $700 million issue.
For the October issue, the MAS received close to $1.1 billion worth of applications for the $900 million allotted.
The latest SSB issue comes as global interest rates rise, with local banks hiking their fixed deposit rates. UOB on Monday raised its Singapore dollar 15-month fixed deposit rate to 3 per cent.
The interest rates of each monthly SSB issuance are based on the average Singapore Government Securities yields in the month before applications open.
These have been on the rise in tandem with policy tightening by the United States Federal Reserve, which has so far raised the federal funds rate to the 3 per cent to 3.25 per cent range to tame inflation.
The $900 million SSB issue for November will mature 10 years later in November 2032. The first interest payment will be made on May 1, 2023, and subsequent payments will be made every six months on Nov 1 and May 1 until maturity.
SSBs are designed to complement investors' savings and investments over the long term and are fully backed by the Singapore Government.
Applications for the November tranche opened at 6pm on Monday and will close at 9pm on Oct 26.
Applications can be made via the Internet banking websites and automated teller machines of DBS/ POSB, OCBC and UOB as well as OCBC's mobile app; or via the Supplementary Retirement Scheme (SRS) or the Internet banking portal of an investor's SRS operator.
Investment amounts start from $500 and can be made via cash or SRS funds.
