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3.47% 10 year average yield! SSB beats CPF again!

Tuesday, November 1, 2022

A short blog to say I will be diverting money set aside for voluntary contribution to my CPF account in 2023 to Singapore Savings Bond (SSB) again.

With a 10 year average yield of 3.47%, the latest round of SSB soundly beats the average return of 3% I would get from the CPF for doing voluntary contribution to my OA and SA.

If you are interested in how I arrived at this conclusion, see:

CPF or Singapore Savings Bond?

Source: MAS.





I expect this round of SSB to be oversubscribed again with its record beating 10 year average yield.

The last round of SSB was 2.44x oversubscribed and even if no new funds joined the fray, this round of SSB would be 1.44x oversubscribed if only unsuccessful funds from the last round reapplied.

So, I won't be surprised if my application is partially filled again.

$10,000 again?

Maybe.




Well, I will only be applying for $28,000 this time since I got $10,000 the last time.

If some of my money gets refunded, it might not be a bad thing as the final round of SSB in December could offer an even higher 10 year average yield.

Hmm.

Maybe, I should hedge. 

I should apply for $14,000 this time and apply for $14,000 in December.

OK.

Sounds like a plan to me. 

Good luck to us all.

Recently published:
Is there hope for Chinese tech?

Related post:
Singapore Savings Bond 2.44x oversubscribed.




15 comments:

Yv said...

Hi AK,

I will try for slightly higher than 10k, market liquidity seems to be tighter towards year end, hopefully they might increase the quota.


Siew Mun said...

will you top up CPF MA to the prevailing BHS for 2023?

AK71 said...

Hi Yv,

I will try with 14K.

There is always December's SSB. ;p

AK71 said...

Hi Siew Mun,

Is the BHS for 2023 announced already?

I might have missed that.

I will top up the CPF MA as it is a straight 4% interest rate (unlike VC to OA and SA) unless SSB's 10 year average yield exceeds 4%.

Desmond Yong said...

I seriously do not understand why AK..Josh and a few others are so crazy about this bond thing....@3.47%...it is hardly on par with the big 3 banks...even if you can get $100k allotment...it's just $3470 annually...the gap to the ~5% from banks is more >$1K per annum....many say SG bond is AAA...but if the big 3 banks are not as safe...then the whole SG will not be spared...so will the bond...can AK speak a little bit to yourself about my view? Is it really need to be so headache to participate in the lucky draw?

AK71 said...

Hi Desmond,

Some people are comfortable with having no emergency fund and having 100% of their portfolio in equities.

I cannot sleep well without an adequate emergency fund and I cannot sleep well being in 100% equities.

I need a meaningful risk free, volatility free component in my portfolio and this is achieved using the CPF.

Hence, my yearly voluntary contributions to my CPF account.

I have not been interested in the Singapore Savings Bond for the longest time, if you remember some of my older blogs on them.

In fact, for a long time, I preferred short term fixed deposits for my emergency fund instead.

Now, my interest in Singapore Savings Bond goes only as far as to use funds meant for voluntary contributions to my CPF.

So, my being "crazy" about Singapore Savings Bond is limited in scope.

I am substantially invested in all three local lenders and still increasing my exposure.

References:
1. Growing passive income: Equities, CPF and bonds.
2. CLCT: Staying defensive and Chinese banks.
3. Is there hope for Chinese tech? 100% invested.

AK71 said...

See also:
CPF or Singapore Savings Bond?

Jermel said...

Hi AK71

Can you compare between CPF, SSB, and T-Bill?

AK71 said...

Hi Jermel,

You might have missed the blog where I explained how I would be using SSB and T-bill.

See:
Growing passive income: Equities, CPF and bonds.

Just talking to myself, of course.

Ahju said...

Hi AK

thanks lots for your sharing. I just started reading your blog recently after hearing from my brother and sis-in-law.

May I seek your thoughts on averaging down comfort delgro?

Many thanks. Kind regards
PP

AK71 said...

Hi Ahju,

I have decided to publish my reply in a blog:

Add ComfortDelgro?

Good luck to us all. :)

HappiSnoey said...

Hi AK, sorry to take your time off gaming. ;) Now with UOB dishing out FD rates at 3.4% 12 months tenor for deposit amounts $10k-$49,999, would you consider this when you have excess after SSB allotment? Foreign banks even higher. Dec likely to see higher FD rates. TIA

AK71 said...

Hi HappiSnoey,

No interest in Fixed Deposits now.

I have been moving funds from maturing Fixed Deposits into 6 months Treasury Bills. ;)

3.4% for 1 year Fixed Deposits?

As a UOB shareholder, I like it but not as a UOB customer. ;p

References:
1. 4.19% p.a. from 6 months T-bills.
2. Growing passive income.

tt said...

Dear AK,

I followed your blog and started to the OA to SA monthly transfer in 2015. As my salary increased, I did VC of $3k per year to my MA. At the moment, I am $7k away from 2022 BHS and and $40k away from 2022 FHS.

I'm 45 this year and have 24 months rainy day fund in my savings account. Recently put some of the rainy day fund into 6 months T-bills for 4.28%.

I am able to fund my MA by $3-5k this year. Should i continue to top up my MA or use the money to buy a SSB?

Please talk to yourself on the following scenario ^_^

Thank you!

AK71 said...

Hi tt,

Wow! 2015? Time flies.

24 months of emergency fund is what I have too. Very prudent especially when already in your mid 40s.

As you probably already know, I am not doing voluntary contribution to my CPF in 2023.

Instead, I am channeling the funds to Singapore Savings Bonds.

However, I will still be topping up my CPF MA in 2023 as that yields 4% per annum which is much higher than the 10 year average yield offered by recent Singapore Savings Bonds.


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