This month’s SSB May 2026 (SBMAY26 GX26050H) has been released: 1.40% for the first-year rate, and 2.14% for the 10-year average rate. Yay, the 10-year average rate broke the 2% mark again! After months of declining rates, we finally broke this trend this month! Given the ongoing rate-cut cycle, should we consider this SSB offering?
SSB Offering Details
This SSB May 2026 offers higher rates than the previous month’s, with the first-year rate at 1.40% and the 10-year average rate at 2.14%.
The geopolitical situation in the Middle East between Israel, the US, and Iran may contribute to rising rates. With the Straits of Hormuz being blocked by Iran, around 20% of the global oil supply is affected, contributing to the skyrocketing price of oil. Unfortunately, higher oil prices may push inflation higher, reducing the likelihood of further rate cuts.
If you are interested in this month’s SSB offering, please take note of the following application timeline:
Competitiveness
The chart shows that SSB rates have been declining over the past few months. This month’s unexpected increase appears to be a slight relief to the market.
However, if we look further back, we can still see that the SSB rates in 2023-2024 were much higher, so we can safely say that this SSB May 2026 is not particularly competitive historically.
Future Rates
We can try to make an educated guess about where interest rates will go in the future by following the Fed’s projections and the market’s expectations.
The Fed maintained the current interest rates at its March FOMC meeting, while continuing to monitor market data before deciding on any future rate moves.
Since last month, the market has been significantly paring back its rate-cut expectations amid the escalating geopolitical situation in the Middle East. The market expects no rate cuts this year or next. Whew!
SSB tends to track this benchmark interest rate; therefore, we may expect SSB rates to also range around the current rates. However, with the geopolitical situation in the Middle East dominating the headlines lately, we can expect interest rate expectations to remain volatile as further developments or escalations unfold.
Next Month Rate Projection
Generally, we can make an educated guess about where rates will be next month by following the Singapore government 10-year bond yield in the market. SSB 10-year average rate tends to track this yield.
Although yields have generally been declining, we have recently seen an uptick. Should we maintain this trend throughout this month, we may see slightly higher SSB rates next month.
However, the future of these rates remains closely tied to ongoing geopolitical tensions in the Middle East. Consequently, any shifts in that region will have a major impact on where the rates will eventually land.
What Do We Do?
We love SSB because it lets us lock in rates for up to 10 years while still allowing us to redeem monthly with accrued interest. Throughout 2023, we have migrated all of our short- to medium-term cash allocation into SSB to lock in the higher rates then for up to 10 years.
Because this SSB May 2026 rates are lower than what we have been holding, we will not be participating in this month’s offering.
Will you be participating this month? If so, you may follow our step-by-step guide to buying SSB.
