Singapore Savings Bonds November 2023 Interest Rate Reaches Record High This Year

After waiting for 3 long quarters, retail investors can finally rejoice at what is a new year-to-date high interest rate for the Singapore Savings Bonds (‘SSB’). For SSB to be issued in the month of November 2023, the average return over 10 years is 3.32% which is the 2^nd highest ever in its history. With such attractive long-term returns, Singaporeans may be enticed to part with their cash once again. In this article, I will share more about this month’s issuance as well as my own SSB portfolio and past allotment data.

Singapore Savings Bonds Nov 2023

Diagram 1 shows the interest rate for Singapore Savings Bond for the issuance month of November 2023.

I find this month’s SSB to be particularly attractive because the returns are quite smoothed out, i.e., even the initial interest rates are high to begin with. To lock in 3.21% guaranteed, risk-free interest rate for the first 6 years is music to my ears. Hard to find an equivalent financial instrument offering such comparable returns. Therefore, I am definitely participating in this month’s issuance as I see this as a good opportunity to further optimise my SSB portfolio. That’s right, I have been diligently redeeming SSB with lower coupon rates and replacing them with higher-yielding ones.

Why Heartland Boy Is Balloting for SSB Nov 2023

As shown in Diagram 2, I have successfully replaced earlier SSB tranches that were yielding 2+% with tranches offering a minimum of 3% interest rate. For each time I do this, I pay a $2 transaction fee (one-way) but this is more than offset by the higher interest rates that I will be receiving. If I am successful in adding SSB Nov 2023 into my investment portfolio, it will improve my portfolio’s overall yield. But by how much is up to anyone’s guess as I expect competition to be stiff this month.

Past-Year SSB Allotment Outcome

With reference to Diagram 3, retail investors would have been able to obtain the amount bidded for the past 6 issuances, subject to an individual’s maximum holding of $200,000. That is because these tranches were undersubscribed. I expect this month’s SSB to be oversubscribed as what happened to SSB Dec2022 should provide investors with a good clue. For that specific issuance, the amount offered for auction was $1 billion which is the same for November 2023. Cut-off allotment was $14,000 then.

If I were to hazard a guess, I anticipate cut-off allotment to be at least $20,000. This is much higher than December 2022 because of the following reasons:

• Latest cut-off yield for 6-month T-bills was 4.07% which would have attracted plenty of hot money, and
• Recent under-subscription for SSB seemed to suggest that demand for this product had waned.

This will also be the approximate range that I will be tendering for as I took advantage of the recent upturn in oil and energy prices to pare down my holdings in Rex and Geo Energy which resulted in a slight increase in my cash holdings. Finally, I will also wait till it is close to the application deadline of 26 October before applying so that I minimise the opportunity cost.

Conclusion

I see Singapore Savings Bonds as a good financial instrument alongside high-yield savings accounts. My objective is to max out the individual limit during this cycle of high interest rates. When we enter into the next cycle of low interest rates (trust the Americans to print more money for the next recession), a risk-free portfolio yielding 3+% annually will not look too shabby then. Therefore, buying SSB now is a long-term play because there are better alternatives for those with shorter investment horizon.

This article is published on 8 October 2023.

–

<EASY CHANCE TO WIN PLAYSTATION 5>

For gamers who are keen to score a Playstation®5 (worth S$799), simply complete a simple Prudential X SingSaver form pertaining to your financial goals. 30 lucky winners will be notified and officially announced on SingSaver blog by 12 Jan 2024. Do note that this is a lead acquisition exercise so do expect a Prudential representative to contact you thereafter.

<WEBULL AMAZING PROMOTION IS BACK AGAIN>

For those who missed the amazing Webull’s promotion back in May, you are in luck as it is back once again. Basically, new users can open and deposit as little as 1 cent to earn a minimum of USD 30 to a maximum of $2,000 (given in the form of US blue chip stocks)!

I did a review on Webull and it is something that I personally use for my investment portfolio as I like its user-friendly features. If you are looking to earn some easy money, you can open a Webull account with this referral link.

<SUPER RARE OCBC CREDIT CARDS PROMOTION>

I rarely see such a good promotion when it comes to credit cards issued by our local banks. For new to OCBC card applicants, simply spend $500 within 30 days of card approval to receive any of the following gifts:

• S$320 Cash via PayNow
• S$340 of eCapitaVoucher
• Apple iPad 9th Gen 10.2 Wifi 64GB (worth $503)
• AirPods Pro (Generation 2) + MagSafe Charger (worth S$421),

If you wish to participate in this exclusive SingSaver promotion which ends on 31 Oct, you can click on the link to apply for the participating OCBC credit card:

1. OCBC 365 Credit Card

Sign-ups during this period also receive 3X chances to win $1,010 and $5,000 bonus cash in SingSaver 101! Milestone Giveaway!