Singapore Savings Bond 10-year average yield reaches year-to-date high of 3.32%

SINGAPORE - The average return per year for the latest tranche of the Singapore Savings Bond (SSBs) has reached a new year-to-date high of 3.32 per cent.

The October tranche of bonds, to be issued in November, has a first-year interest rate of 3.21 per cent. Interest rate at the 10-year mark stands at 3.63 per cent.

The allotment size is $1 billion, with investment amounts starting at $500 and issued in multiples of $500.

Applications for the bonds will open at 6pm on Monday and close at 9pm on Oct 26.

Interest rates for the SSBs have risen consecutively for the past four tranches, after yields dropped to a low of 2.81 per cent in June this year.

In September, the average 10-year returns for the bond was at 3.16 per cent – up for the fourth consecutive time, with an allotment size of $800 million.

The rise in yields follows a series of United States rate hikes throughout the year, and comes as investors continue to expect another round of hikes in interest rates by the end of this year.

SSBs take their interest rates from the average yields of Singapore government bonds from the month before, but are subject to adjustments to ensure interest rates do not dip over time for inverted yield curves – where yields of short-term bonds become higher than long-term bonds.

SSB yields reached a historic high of 3.47 per cent for its 10-year average in December 2022. THE BUSINESS TIMES