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Many readers asked me about Singapore Savings Bond recently and apparently it is because the coupon is now 1.55% for the first year which is much higher than what any local bank I know would pay for a 1 year fixed deposit.
I was not interested in the Singapore Savings Bond for various reasons and to avoid repeating myself, if you are not familiar with the reasons, please read the following blog (plus details on eligibility and mechanics):
Singapore Savings Bond: Good or bad?
When I blogged about the bond in the middle of 2015, the bond's coupon for the first year was 0.9%.
At that time, we could get 1.45% interest for a one year fixed deposit easily.
The Singapore Savings Bond was unattractive for money in my emergency fund and war chest, therefore.
Interest rates for one year fixed deposits have declined although I am puzzled why they would because with interest rates on the rise, short term interest rates should be impacted first.
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| Singapore Savings Bond's coupons. |
Whatever the reason, the lower interest rates offered by local banks for one year fixed deposits make the Singapore Savings Bond's 1.55% coupon for the first year more attractive.
So, what to do?
I am going to have some of my war chest money in this bond.
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| Closing on 26 Jan at 9pm. |
I am going to think of this as another fixed deposit.
With the higher coupon for the first year, having some money in the Singapore Savings Bond now gels more with my methods.
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| Taken from DBS internet banking. |
Application or redemption is also very easy because they made it available through internet banking.
Very good for lazy AK who doesn't want to leave home to queue at an ATM.
Related post:
Use fixed deposits (FD) for emergency fund and war chest. (And now we say SSB too.)
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