Singapore Savings Bonds

[Sausage]

if we are fully using the $200k allowance and liquidate some existing holdings now will we still be in time to apply for the December 2022 issue?


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[MrAwesomeX]

Seems like Dec22 SSB will break Nov22's record yield.

4-5% here we go .

 

[Perisher]

With tbills at 3.7%… that should curb some demand for SSB at 3.3%…
Though I still expect it to be oversub by some distance…

 

[m0n0n0ke]

With tbills at 3.7%… that should curb some demand for SSB at 3.3%…
Though I still expect it to be oversub by some distance…

3.7 is really nice...better than fd

 

[sohguanh]

3.7 is really nice...better than fd

And the icing on the cake is the "interest" aka discount will be credited by today for everyone better than FD need to wait until maturity date.

 

[yiron]

And the icing on the cake is the "interest" aka discount will be credited by today for everyone better than FD need to wait until maturity date.

It's not an upfront interest for t-bill. U deposit 98.12 today and u get back 98.12 principal + 1.88 interest on maturity.

 

[brianlee_sg]

I

It's not an upfront interest for t-bill. U deposit 98.12 today and u get back 98.12 principal + 1.88 interest on maturity.

no for tbils you get back only the principal on maturity.

 

[sohguanh]

It's not an upfront interest for t-bill. U deposit 98.12 today and u get back 98.12 principal + 1.88 interest on maturity.

If you notice I put a double-quote for the word "interest" MAS also never use this word. It is a discount. But to layman who are used to FD and would like to compare it's equivalent "interest" is something that they understand.

 

[craze_ho]

Can but you need to pay S$2 transaction fee everytime u buy and sell

Ok thank u

 

[craze_ho]

Projection by https://www.ilovessb.com , based on data up until 11/10/2022:

SBDEC22

Year from issue date	1	2	3	4	5	6	7	8	9	10
Interest %	3.30	3.33	3.44	3.44	3.44	3.44	3.44	3.45	3.45	3.46
Average return per year %	3.30	3.31	3.36	3.38	3.39	3.40	3.40	3.41	3.41	3.41

Will you hold your horses and all in on Dec? Or still proceed nov

 

[sohguanh]

Will you hold your horses and all in on Dec? Or still proceed nov

SSB when very hot you all in also cannot get fully alloted. Look at the fund size they allocated for application. The last hot SSB issue everyone get 9k and some lucky get 9.5k

 

[item2sell]

Will you hold your horses and all in on Dec? Or still proceed nov

all in Nov and Dec $50k should be enough

 

[linusz]

Seems like Dec22 SSB will break Nov22's record yield.

How u know ah
So don't apply this month is it

 

[yiron]

I

no for tbils you get back only the principal on maturity.

Your principal is 98.12. U get back 100 upon maturity.

 

[reddevil0728]

How u know ah
So don't apply this month is it

Cause next month is based on this month Daily average 10y sgs ma.

u can don’t apply this month, but how sure r u getting ur full allocation next?

 

[yiron]

If you notice I put a double-quote for the word "interest" MAS also never use this word. It is a discount. But to layman who are used to FD and would like to compare it's equivalent "interest" is something that they understand.

My point is the upfront refund mechanism of t-bill is not economically better than FD.

For t-bill, upfront u pay Principal (P), and upon maturity u get back Principal + Interest (P+I).
P is 100 minus upfront refund. P+I = 100.

For FD, upfront u also pay P and get back P+I upon maturity.
Just that for FD, P is typical some nice rounded number like $10k, unlike t-bill where your P is $9812.

End of the day, both t-bill and FD are bullet pay-offs i.e. u put in a lump sum upfront and get back that lump sum plus interest at maturity.

 

[yiron]

How u know ah
So don't apply this month is it

SSB rates is construed off the 30 days average of the prior month SGS yields. The SGS yields are trending higher this month so it's likely that Dec22 SSB will be higher.

Whether to apply is up to your individual circumstances. I will still apply since SSBs tend to be over-subbed this period so I'm spreading out my allotment.

 

[sohguanh]

My point is the upfront refund mechanism of t-bill is not economically better than FD.

For t-bill, upfront u pay Principal (P), and upon maturity u get back Principal + Interest (P+I).
P is 100 minus upfront refund. P+I = 100.

For FD, upfront u also pay P and get back P+I upon maturity.
Just that for FD, P is typical some nice rounded number like $10k, unlike t-bill where your P is $9812.

End of the day, both t-bill and FD are bullet pay-offs i.e. u put in a lump sum upfront and get back that lump sum plus interest at maturity.

But for some ppl the immediate to get the "interest" monies is more satisfying then waiting X months later. I know I am one of them.

 

[yiron]

But for some ppl the immediate to get the "interest" monies is more satisfying then waiting X months later. I know I am one of them.

If u pass me $100 to invest and I immediately return u $5, did u actually invested $100 (with an immediate gain of $5) or did u invested $95?

Sorry for harping on this (and to emphasize, this is nothing personal), but I feel it's important to clear the air on this aspect as framing it as an "upfront interest" has the potential to mislead and result in sub-optimal decisions.

 

[Slowdown]

My point is the upfront refund mechanism of t-bill is not economically better than FD.

That refund can be deployed for other purposes immediately. That itself is the icing.

Over the years I always preferred Maybank's FD because they had the interest paid upfront feature. I could use the interest elsewhere to earn even more profit. That is definitely one positive point I like T-Bill over SSB.

Just because MAS throws some jargon out that we must recite exactly. Nothing to stop us from thinking that we get back $1.88 interest today and on maturity get back $100 principal. Such explanation is easier for layman to understand than the MAS jargon.