SSB Vs T Bills

[milkfish]

actually havent happen before so no one really knows if SDIC got use or not

when reach the point where a local bank collapse to trigger SDIC, most likely government also already topple. so where to find the money for SDIC to compensate?

TBill definitely not safe. It's not like MAS can print money to pay you back...

 

[reddevil0728]

TBill definitely not safe. It's not like MAS can print money to pay you back...

Not safe or safe?

MAS can print as much SGD as they want

 

[milkfish]

I thought we're dealing in sarcastic terms to discourage non-comp bidders from lowering tbill yields...

 

[reddevil0728]

I thought we're dealing in sarcastic terms to discourage non-comp bidders from lowering tbill yields...

ohhhh.... i didn't see the post that was quoted. ya u r right. haha

 

[lzydata]

The last bullet point refers to Tbill though

OK removed.

 

[aeng]

I think Fixed Deposit safer. Choose local bank (DBS, UOB & OCBC). They won't collapse. Govt may change during the next election and not sure if the new govt will recognise the T-bill you bought. So go for FD instead.

you're confusing the govt with the civil service.

in any case, do you think any sane gov will choose to default on their debts and kill their own credit ratings?

 

[jayou8]

I remember reading somewhere that SSB is actually constructed based on T-bills, SGS and a Bermuda option.

So you are actually paying for the price of T-bills, SGS and premium of the option.

If you don't need the right to redeem at anytime during the duration, it will be better off buying T-bills as you "save" on the premiums.

 

[reddevil0728]

you're confusing the govt with the civil service.

in any case, do you think any sane gov will choose to default on their debts and kill their own credit ratings?

Think it was meant to be sarcastic to spread fear so as to discourage ppl from subscribing to Tbill hence don’t drag down cutoff yield

I remember reading somewhere that SSB is actually constructed based on T-bills, SGS and a Bermuda option.

So you are actually paying for the price of T-bills, SGS and premium of the option.

If you don't need the right to redeem at anytime during the duration, it will be better off buying T-bills as you "save" on the premiums.

It is just based on 10y sgs rate for the top line figure.

got so complicated meh.

 

[wutawa]

- Tbill non-competitive bidding confirm will get. Ssb allocation limit is subjective.
- Tbill will receive discount 1st. Ssb will receive int every 6 mths.
- Tbill has new 1 every 2 wks. Ssb is every mth.

 

[reddevil0728]

- Tbill non-competitive bidding confirm will get. Ssb allocation limit is subjective.
- Tbill will receive discount 1st. Ssb will receive int every 6 mths.
- Tbill has new 1 every 2 wks. Ssb is every mth.

tbill non comp bid will get, but actually allocation limit is also subjective if over sub.

 

[wira]

in a nutshell,
1. use T-bill if you don need the funds in next 6 mths to 1 year ( similar to FD ). you can still sell on secondary market but its not very liquid and may need sell at loss )

2. Use SSB if you want your funds to be liquid ( Eg your emergency funds or warchest that needs to deploy quick ) as SSB can liquidate anytime with no penalty.

3. Use Fixed Deposit if you trust local banks more and likes queue up for hours and nothing to do

 

[reddevil0728]

in a nutshell,
1. use T-bill if you don need the funds in next 6 mths to 1 year ( similar to FD ). you can still sell on secondary market but its not very liquid and may need sell at loss )

2. Use SSB if you want your funds to be liquid ( Eg your emergency funds or warchest that needs to deploy quick ) as SSB can liquidate anytime with no penalty.

3. Use Fixed Deposit if you trust local banks more and likes queue up for hours and nothing to do

Ssb liquidation is from a few days to a month ish

 

[wutawa]

in a nutshell,
1. use T-bill if you don need the funds in next 6 mths to 1 year ( similar to FD ). you can still sell on secondary market but its not very liquid and may need sell at loss )

2. Use SSB if you want your funds to be liquid ( Eg your emergency funds or warchest that needs to deploy quick ) as SSB can liquidate anytime with no penalty.

3. Use Fixed Deposit if you trust local banks more and likes queue up for hours and nothing to do

I tink malaysia banks fd also buay pai. Cimb can apply online.

 

[sohguanh]

I tink malaysia banks fd also buay pai. Cimb can apply online.

Foreign currency FD careful of the exchange. Rates high but say mature you want to convert back to SGD will see that time rate. Usually won't lose but may not get to that X % to the max. But if you keep renew don't convert back ok.

But if you are referring to Msia bank in Spore SGD FD then yes buay pai

 

[DelinquentXX]

Its true FD is safer than govt bonds, because FD is guaranteed by SDIC!

T-bill and SSB is not guaranteed by SDIC!

Need to spread more fear, so that fewer people bid, interest rate can be higher!

You are right. Both tbill and ssb not guaranteed!!!!

Going for the best fd nao.

 

[happycanliao]

Why US bill still running even after their government changed a few times? You all think too much la...look at Japan, Korea, etc...any of their tbills not recognised after garmen changed?

 

[reddevil0728]

Why US bill still running even after their government changed a few times? You all think too much la...look at Japan, Korea, etc...any of their tbills not recognised after garmen changed?

Sarcasm you know

 

[yiron]

I remember reading somewhere that SSB is actually constructed based on T-bills, SGS and a Bermuda option.

So you are actually paying for the price of T-bills, SGS and premium of the option.

If you don't need the right to redeem at anytime during the duration, it will be better off buying T-bills as you "save" on the premiums.

Nope, SSB is construed off 1Y, 2Y, 5Y, 10Y SGS yield. When held to maturity, the returns of the SSB should be virtually the same as 10Y SGS of the same period.
The put option (i.e. right to redeem at par before maturity) comes free (essentially the option premium is subsidized by Govt). Which is why SSB is a free lunch, and only open to individuals (not institutions) with a $200k cap.

https://www.mas.gov.sg/-/media/MAS/...20190201-SSB-Technical-specifications_SRS.pdf

 

[jayou8]

Nope, SSB is construed off 1Y, 2Y, 5Y, 10Y SGS yield. When held to maturity, the returns of the SSB should be virtually the same as 10Y SGS of the same period.
The put option (i.e. right to redeem at par before maturity) comes free (essentially the option premium is subsidized by Govt). Which is why SSB is a free lunch, and only open to individuals (not institutions) with a $200k cap.

https://www.mas.gov.sg/-/media/MAS/...20190201-SSB-Technical-specifications_SRS.pdf

Great find you have found! Good for layman like me to understand.

Much easier than the one I have been reading.

Abstract​

The Singapore Savings Bonds (SSB) is a unique investment program offered by the Singapore government whereby retail investors can earn risk-free tax-free step-up interest closely matched to Treasury bond rates for up to 10 years and can redeem on any business day prior to maturity without any early redemption penalty. This study analyses the unique design of the SSB and provides a valuation of the Bermudan option for early redemption that is embedded in the SSB. The Black-Derman-Toy model is used to build the interest rate tree, and an iterative method is employed to avoid arbitrary specification of the pre-determined short rate volatility function. This bespoke Bermudan option can have changing strike prices over time. It also has a novel characteristic whereby the value of exercise to a buyer need not equal to the cost of being exercised to a seller. Better understanding of embedded options within government savings bonds leads to innovative designs that may encourage effective citizens’ savings.

 

[reddevil0728]

Great find you have found! Good for layman like me to understand.

Much easier than the one I have been reading.

it's actually on on the SSB website itself. see Resources and FAQs of the following link

https://www.mas.gov.sg/bonds-and-bills/investing-in-singapore-savings-bonds
product factsheet, FAQs etc.