Singapore Savings Bond SSB March 2024: 10-Year Average of 2.88%

SSB March 2024

MAS has released the latest Singapore Savings Bond SSB March 2024 offering: first-year rate of 2.74% and 10-year average of 2.88%. For some of us disappointed with last month’s offering, it’s worth noting that the current SSB offering is slightly better than the previous month. Yay! Should we consider this month’s SSB?


SSB March 2024 Offering Details


SSB March 2024 offers a first-year rate of 2.74% and a 10-year average of 2.88%. These are a step up from the previous month’s offering of 2.72% and 2.81%, respectively. Despite the slight increase, this latest offering is still much lower than the rates we have seen throughout 2023, north of 3% for both the first year and 10-year average.

The expected lower rates are due to the projected pivot by the Fed this year, ending its past campaign of raising rates.

If you have not locked in the higher interest rates, you may consider looking into this SSB March 2024 offering. If interested, please apply before 26 Feb 2024, 9PM, and take note of the following application timeline:

SSB March 2024 - Application Timeline


Is SSB March 2024 Competitive?

Historical Comparison

With relatively lower interest rates this year, most investors will assume that this latest SSB offering is not competitive enough. But, let’s not jump to conclusion too quickly and see where the current level is compared to the historical rates:

Historical SSB Interest Rates - Mar 2024
Source: SSB Interest Rates History

The chart above shows the first-year and 10-year average SSB rates over the past few years. It’s evident that even though the current rate is lower compared to 2023, it remains one of the highest in recent years. It is still much higher than the levels we saw in 2021 and early 2022.

Are you considering filling in your SSB allocation? This SSB March 2024 can be your opportunity to secure higher rates for the next decade.

Future Interest Rates Projection

Here is another consideration for you on whether or not to start locking the current rates.

Market rates projection - Mar 2024
Source: CME Group

The table above shows the market expectation of where the US benchmark interest rate will be for each month. We can see that the market expects up to six rate cuts this year starting in May 2024. The Fed has also hinted at up to three rate cuts this year. The Fed and the market agree that interest rates may have peaked and will start reversing this year.

Do you agree with their projections? If yes, this SSB March 2024 can be your opportunity to lock the higher rates for longer before interest rates start reversing later this year.


Utilizing SSBs for Long or Short Term

SSB is a long-term 10-year Singapore government bond that allows monthly redemption (partial or full) without penalty. You even earn the accrued interest. Because of this unique feature, SSB can be utilized for both short and long-term cash solutions.

As a long-term investment, SSB suits investors with the lowest risk profile whose objective is capital preservation. SSB guarantees your principal and interest payout and is perfect for this group of investors.

For short-term cash solutions, SSB offers investors a solution to park their short-term cash in a relatively liquid instrument (with monthly redemption) while still earning relatively competitive guaranteed payouts. Investors also have the option to keep investing for the next decade should they wish to. In our opinion, SSB is versatile in this regard.


Recycle/Swap Older SSBs

Looking at last month’s SSB result, we can roughly expect this month’s offering will also have a low demand. Low demand means we can get full allocation as we wish. If you have older SSBs yielding much lower than 2.88%, you can consider recycling those into this month’s SSB, as there will be less probability of hitting any quantity ceiling.


What Would We Do?

We have been utilizing SSB to park our short-term cash needs and optimize the interest rates throughout 2023. Because this SSB March 2024 offers lower rates than the 2023 levels, we will not be participating in this month’s offering.

With interest rates expected to reverse this year, we have migrated most of our shorter-term bonds, such as T-bills, into SSB to lock in the higher rates for the next ten years. Furthermore, the ability to redeem each month with accrued interest provides greater flexibility, surpassing that of T-bills.

Will you be applying for this month’s SSB? If so, you may follow our step-by-step guide on how to buy SSB.

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Disclaimer: The information provided here is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice or recommendation of any sort.

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