The latest offering for SSB June 2024 has been released: 3.33% for the 10-year average and 3.26% for the first year. These rates are super attractive, and the first and 10-year average rates are among the highest in recent years. Should we consider putting our cash into this month’s SSB?
SSB June 2024 Details
Without a doubt, this SSB June 2024 offering is highly competitive. The 10-year average of 3.33% and the first-year rate of 3.26% stand out as some of the highest in recent times, providing a strong case for considering this SSB.
This month’s offering is also a significant step up from the previous month’s SSB rates of 3.06% for the 10-year average and 2.99% for the first-year rate.
What do you think? Are you interested in this SSB? If so, you can apply before the closing date of 28 May 2024.
How Competitive Is This Month’s SSB?
We have mentioned above that this month is very competitive. But, as with any investment, please don’t just take our word for it; let’s look at the data. Here is the historical SSB rates chart over the past few years:
This SSB June 2024 offers one of the highest rates in recent years. Despite the persistent inflationary pressure, the Fed and the market still expect that we may have reached the peak of this rate hike cycle, and the following action will either be a hold or a rate cut. If you agree with this sentiment, this can be your opportunity to lock in the higher rates for much longer, up to ten years! You can still do monthly redemption to keep your cash relatively liquid.
How About Next Month’s SSB?
After a string of recent hot inflation data, the Fed and the market have adjusted their interest rate expectations. At the start of the year, they were expecting 3-6 rate cuts in 2024, and now they only expect one rate cut towards the end of the year.
What does this mean to us? We may have more chances to get higher rates in the coming SSB offerings. We don’t know yet, but next month’s SSB could offer highly competitive rates like this month’s.
One thing to note is that SSB has a quantity ceiling, which means if there is a high demand for a particular offering, this quantity ceiling may cap your allocation, and you may not get your full desired allocation. For this reason, even if you believe next month’s SSB will offer even higher rates, you should still consider applying for this month’s SSB if you think it is already competitive enough. This will increase the probability of you getting your desired allocation (especially for a larger amount) even when there is a quantity ceiling due to high demand.
What Would We Do?
We love this SSB June 2024 offering and think the rates are very competitive given the long-term tenure of ten years. As such, we will participate in this month’s SSB by recycling our older SSBs with lower rates.
We have also migrated some of our short-term cash allocation in T-bills into SSB to lock in the higher rates for longer (up to ten years) while still having decent liquidity from the monthly redemption.
Will you be applying for this month’s SSB? If so, you may follow our step-by-step guide on how to buy SSB.
