The Monetary Authority of Singapore (MAS) has released details for SSB Dec 2024: 2.66% for the first-year rate and 2.81% for the 10-year average. These rates are much better than last month’s offering. Considering the rate cut cycle we have just entered, the rate bump can be a decent opportunity for investors yet to fill their desired SSB allocation.
SSB Dec 2024 Offering
The interest rate structure for this month’s SSB is relatively attractive compared to last month’s. It offers 2.66% for the first three years, gradually increasing to 3.01% by the 10th year. The 10-year average return is 2.81%.
Many of our readers may have filled their SSB allocation throughout 2023 and 2024. But for those who haven’t, this month can be your chance, given that we may have entered a new rate-cut cycle, with the Fed introducing its first 0.5% rate cut last September.
For those interested in this SSB Dec 2024 offering, please apply before 26 Nov 2024:
Competitiveness
With the recent bump in this month’s SSB interest rates, let us see where we stand historically:
The chart shows that this month’s SSB offered a decent bump in interest rates but still relatively lower than what we were used to throughout 2023 and 2024. That said, compared to what we had in 2022 or earlier, the current rates are still much more competitive.
Given that we may have just entered a new rate cut cycle, we can expect the future rates to be lower as the Fed cuts interest rates further.
If you have yet to fill your desired allocation, you may consider this SSB Dec 2024 offering to lock in these rates for the next ten years.
Future Projections
As mentioned above, we are entering a new rate cut cycle, with an initial cut of 0.5% in September. How many rate cuts can we expect in the coming months?
After the 0.5% rate cut in September, the Fed still expects another 0.5% rate cut by the end of 2024 and another 1% rate cut by the end of 2025.
The market also agrees with the Fed’s projection:
With interest rates expected to decline further in the coming months, we can roughly estimate the SSB interest rates to decrease following the pace of this rate-cut cycle.
SSB can be an option if you are still looking for a relatively safe instrument with guaranteed capital and rates. It also allows decent liquidity by allowing monthly redemption without any penalty.
What Do We Do?
We have always advocated locking in these higher rates for as long as possible, as interest rates may soon decline with the new rate-cut cycle we are entering.
We have been optimizing our SSB allocation throughout 2023 and 2024, and most recently, we have been migrating our short-term cash allocation from T-bills into SSB to lock in these higher rates for longer. Because we have filled our desired allocation for now, we won’t be participating in this SSB Dec 2024 offering.
So, will you be applying for this month’s SSB? If so, you may follow our step-by-step guide on how to buy SSB.
