MAS has published the latest SSB Jan 2025 offering: the first-year rate is 2.73%, and the 10-year average rate is 2.86%. These rates are slightly better than last month’s. With the rate cut cycle ongoing, is this one of our last opportunities to lock these higher SSB rates?
SSB Jan 2025 Details
Many investors are probably pleased with the rising rates in this month’s offering despite the US Fed’s embarking on a rate cut cycle. The first-year rate of 2.73% and the 10-year average of 2.86% are marginally better than the last three months’ offerings.
We believe most of our readers may have filled out their desired SSB allocations throughout this and last year. However, for those who still haven’t, this SSB Jan 2025’s higher rates can be your opportunity.
Please take note of the following application timeline:
How Competitive Are These Rates?
Let’s see how they compare to the historical SSB rates in recent years:
The SSB rates have increased over the last two months, although they remain below the rates offered throughout most of 2023 and 2024. Given that we have just entered a new rate cut cycle, we can expect that these rates will trend downward in the long term.
If you have yet to fill your desired SSB allocation, you may want to take advantage of this recent rate bump.
Future Rates Projections
The Fed has embarked on a rate cut cycle, with a 0.75% rate cut so far. They still expect another ~1% rate cut next year.
The market also expects more rate cuts in the coming months:
The table shows that the market agrees with the Fed, though slightly less aggressive with the rate cuts. The market expects the Fed to cut interest rates by 0.25% in December and two more 0.25% rate cuts throughout 2025.
As long-term interest rates decrease, we can anticipate that SSB rates will also decrease, mirroring the pace of these rate cuts.
But how about next month’s SSB? Let’s try to find a hint from the recent Singapore government bond yield chart.
The chart indicates that while the rates have increased in recent months, there has been a downward trend this month. Should this trend continue, there is a chance that next month’s SSB may offer slightly lower rates.
What Do We Do?
We completed our short-term cash migration from T-bills to SSB earlier this year. As a result, we have achieved our desired SSB allocation and optimized it throughout the year.
Given that the SSB Jan 2025 offers rates below our existing holdings, we will likely not participate in this month’s issuance.
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.
