The latest SSB Apr 2025 has been released: the first-year rate is 2.73%, and the 10-year average rate is 2.85%. These rates are lower than last month’s offering, breaking the rising trend of the past several months. Given that inflation and interest rates are decreasing, should we consider this month’s SSB?
SSB Apr 2024 Details
After several months of rising rates, the trend finally broke this month. The SSB for April 2025 (SBAPR25 GX25040F) offers lower rates than last month: the first-year rate is 2.73%, and the 10-year average rate is 2.85%.
As inflation slows and the Fed begins its rate-cut cycle, it’s no surprise that SSB rates are also starting to decline.
If you are interested in this SSB Apr 2025, please take note of the following application timeline:
How Competitive Is This SSB?
The chart above shows the historical SSB rates over the years. Although this month’s offering is lower than last month’s, it remains more competitive than before 2022. Rates were higher from late 2022 to 2024, while rates before mid-2022 were significantly lower.
As the rate-cut cycle continues, we can expect the SSB rates to align with these cuts. If you are still looking to fill in your allocation, you may consider this SSB Apr 2025 to lock in the higher rates for longer.
How About Future Rates?
We are in the middle of a rate-cut cycle that started late last year. Although the pace of this rate-cycle is slower than initially anticipated, the Fed still expects two additional rate cuts this year. The market also expects lower rates in 2025:
The table shows that the market expects three rate cuts in the second half of this year, which aligns with the Fed’s expectations.
In the long term, as long-term rates decline, we expect SSB rates to decline following the pace of these rate cuts. Therefore, barring any black swan event, rates will likely be lower this year.
In the immediate short term, we can estimate the SSB rates offered next month by examining the market’s government bond yield.
The chart above shows the market 10-year yield of the Singapore government bond over the past one year. We can zoom into the far right side, and see that the yield has declined in recent months. The SSB offering typically follows the trend of the 10-year yield. While it is still early in the month, if this trend continues, we can anticipate next month’s offering to be lower than this month’s, with the 10-year average rate hovering at around 2.75%.
What Do We Do?
We use SSB to park our short—and medium-term cash allocation because of its liquidity profile. It allows monthly redemption without penalty while still earning the accrued interest.
We believe that interest rates are likely to decrease in the future. Last year, we migrated all of our T-bills into SSB to take advantage of the current higher rates for as long as possible. This move allows us to enjoy these higher rates for up to ten years.
We have also optimized our SSB allocation over the past two years. Because SSB April 2025 offers lower rates than what we currently have in our holdings, we will likely not participate this month.
Will you be applying for this month’s SSB? If so, you may follow our step-by-step guide on how to buy SSB.
