Don’t see SRS as a tool to do safe investment. Today if you are 32, what is the point of putting inside SSB?
A
very good question!
sometimes it's because there's lack of time to look around to fish for good yields... SSB is dump and park for 10 years can sleep easy at night. peace of mind.
Except you can’t “sleep at night” because at 3.07% p.a. (on a 10 year hold) a Singapore Savings Bond is just not going to help you retire. It might slightly run ahead of inflation if Singapore dollar inflation eases back to 2.0% target, but even that’s a big if.
There’s another problem: if you “spend” some or all of your $200K SSB allotment within a SRS account (a very strange place!) what are you going to do when you actually need a vehicle for short-term savings goals like a wedding or home renovation — what SSBs are actually designed for? If the $200K limit is limiting you might earn less interest on your short-term savings, that’s what. Would earning less interest on short-term savings (raising the cost of your wedding or home renovation, for example) help you sleep at night?
once the rates start to drop below 3%, or 2.5% (ref. CPF) the interest will go down also. then maybe there are other more favourable products.
It doesn’t usually work this way. What just happened to stock prices, for example? They’re at or near new record highs! Ooops.
Stop trying to time markets! This is a SRS account we’re talking about. It’s expressly a long-term account, for most people anyway. Contribute, move the dollars right away into a long-term investment, and then don’t look at it again until you’re approaching age 62.
personally will only put SRS into "capital guarantee" products since it is for retirement. dun want to spend my old days waiting to recoup paper losses or to breakeven. won't ever get to sleep in peace.
Why do you need a “capital guarantee“ on a 30+ year account? You don’t! A capital guarantee is quite expensive, especially over 30+ years.
There are multiple reasons to go with SSB while young.
1. everyone needs some allocation of fixed income.
OK, but that’s called MBH here in Singapore, not SSBs. MBH will have better long-term performance than SSBs. Unless the credit markets in Singapore are completely, persistently broken, and that’s exceedingly unlikely.
2. SSB helps to earn while waiting for opportunity. It only takes $2 and at most 1 month to get the money back
How many people parking SRS dollars in SSBs do you think are waiting for the “right” price within the next 18 months to lob those dollars into DBS stock, for example? What percentage?
Cpf as fixed income not enough?
Another excellent question! The government is offering 4.08% (1Q2024) on CPF MA, SA, and RA. Why would you settle for 3.07% (tops)?
Everyone kpkb say government make cpf compulsory and stop their warren buffet investment opportunity. Then suddenly got 1 group voluntary lock up their SRS to earn 3%.
!
Hilarious, isn’t it?
Also hilarious there are some people rushing to pay off their 2.6% HDB loans as quickly as possible even when ~3.75% T-bills exist.
